INSURANCES THAT WILL PROTECT YOUR ASSETS
In the present day and age, having insurance coverage that will protect you and your assets is one of the most important things you can do. But the problem is that many people today don’t feel the need for insurance.
Because it can at times, seems as if you are spending more than you can afford or you would like to. While insurance may not be an investment, it is a vital part of personal financial management.
It protects you and everything you have worked hard to earn from risks such as theft, fire, and other perils that may occur. Insurance also helps keep your economic resources intact, safe, and valuable. In this article, we are going to consider the top five (5) Insurance Policies that will protect you and your assets.
(1) BRIDGE GAP INSURANCE
If you have just gotten a used or brand new car, you may be under the impression that your car insurance policy will cover you in the event of a claim.
In most cases, all-inclusive insurance will only provide cover up to the car’s actual market valuation. And this could leave a significant gap between the original purchase price and the insurer’s company valuation.
If you want to finance your car purchase, you most likely would need something called GAP insurance. GAP insurance keeps you from being ruined financially when disaster hits your car. It bridges the gap between the amount covered by the regular car insurance and the amount you owed the car loan company. For instance, let’s say you financed $20,000 for your new car purchase.
Three (3) months later, your car may only worth $15, 000 when it is considered “used”. In the event of car theft or accident and your car was written off by the insurance company, they would only want to pay your car’s book value.
It means you will have to pay the extra $5,000. In this case, GAP insurance provides you cover and settle the differences between your insurance company’s valuation and the finance settlement amount.
a) Do you need Gap insurance policy?
Gap insurance is optional supplementary insurance. You may not need it if the terms in your regular car insurance policy indicate that your insurance company will settle the full amount you owed. If you do not have Gap insurance, you will have to handle the financial burden of paying the ‘gap’ should anything happen to your car.
b) Why Buy GAP Insurance?
If you have to finance your car purchase, you will probably have a higher total loan amount than your car’s book value. In this case, the supplementary policy will protect your purchase in case of any serious accident and your vehicle is declared a total loss.
To save more money on your standard auto insurance and you opt for a higher deductible, then your GAP insurance policy may pay that off even if the car is a total loss.
c) Buying A Gap Insurance Policy
Before you opt for any gap insurance policy, make sure you understand the amount offered in the gap policy. You should also know the amount to be added to your monthly bill.
(2) RENTER’S INSURANCE
Many people do not know this type of insurance exists. When you rent a home or apartment, most people would expect the homeowner to be responsible if something goes wrong with the house.
While it is true that the homeowner probably holds insurance on their residence, the insurance normally only covers the actual building you reside in, and that is all they are concerned about.
The burden of replacing your personal property lies on you, and this is where renter’s insurance comes in handy. Renter’s insurance provides you with the assurance that your personal belongings would be covered in the event of damage, theft or if your home is completely burned.
a) What Does Renter’s Insurance Cover?
Renter’s insurance covers, but not limited to the following calamities:
i.Hail or Windstorm
ii.Lightning or Fire
iii.Civil or riot commotion
viii.Malicious or Vandalism mischief
x.Electrical surge damage
xiii.Weight of sleet, snow, or ice
xiv.Water-related damage from home utilities
Furthermore, renter’s insurance can cover alternate living expenses if you must leave your home and stay somewhere else for a while if there is an accident. If you are insured, you can be given money for a hotel and daily living costs while your home is being repaired.
Renter’s insurance also covers if someone falls or is bitten by one of your pets at your home – and you are protected in the case you are sued by them. Renter’s insurance will cover water damage that occurred on your neighbour beneath you because you left your bathtub running.
Alternatively, if your neighbour upstairs is responsible for the water damage, your renter’s insurance will reimburse you the damage cost and then pursues the neighbour so you don’t have to deal with the hassle.
b) What is not covered by Renter’s Insurance?
It is important to realize that a renter’s insurance policy does not cover everything. Most insurance companies do not cover floods and earthquakes. If you live in an area prone to those, you’ll need to buy a separate policy.
c) How Much Renters Insurance Coverage Do I Need?
The amount of renter’s insurance coverage you need naturally depends on how much your personal property worth. Some things you may want to consider include whether or not you can afford to re-purchase everything in your home in the event that disaster strikes.
If your belongings are worth a lot and you live in a high-risk area, having renters insurance could end up saving you a huge sum of money. An excellent way to assess how much money to invest in your policy is to take an inventory of your property.
d) Finding the right renter’s insurance
Once you have determined the net worth of your possession, the next thing is to look around for the ideal renter’s insurance. You can either look at plans online or contact an agent. While the monthly rate is very affordable, you will still want to save money anywhere possible.
But you need to check out what you are paying for. Even though your plan may save a few dollars, it may only cover the basics. If you can get the same plan and more for an extra discount, do not hesitate to go for it.
(3) HOMEOWNERS’ INSURANCE
Your home is probably the most valuable investment and one that you cannot afford to lose to any disaster. Fixing a house is generally expensive if you don’t have any coverage, and can cause financial difficulties. Hence, there is a need to protect your home and homeowners’ insurance offers this protection.
The best homeowner’s insurance policy grants you a secure feeling and security. It covers your house, its content, and the structure of your property. Of course, you can own a home without getting a homeowners’ insurance. But it’s better to buy homeowner’s insurance and be more relieved because of any unforeseen circumstances that can destroy your home completely.
a) Why homeowners’ insurance?
i. It protects homeowners against unintentional damage to their houses and its contents due to fire, storm, theft, vandalism and similar threats.
ii. If someone has an accident in your property, this insurance protects the homeowner and pay for the injured person’s medical bills. It gets worse sometimes, in case the injured person files a lawsuit against the homeowner and still the homeowner’s insurance is there to protect the property owner.
b) How to purchase homeowner’s insurance
It is becoming very easy to obtain homeowners insurance these days. But you should be careful when buying a homeowner insurance as most policies don’t protect against flood and earthquake. Homeowners often need to buy a separate policy for these two types of damages.
So, all homeowners should ensure if the flood or earthquake coverage is included in the policy or not. If you want to find a quality insurance policy to protect your home and belongings, and doing so at an affordable price, you must spend time shopping.
Fortunately, shopping is easier than in the past, as you can now shop for homeowners insurance from your comfy couch or favourite easy chair if you choose. If you decide to shop online, it is best to compare quotes from at least three (3) different insurance companies. Check their policies if it covers your asset, the property protection and the liability protection stated under the claims of your insurance policy. All of these should be done first before deciding on which insurance to get.
c) How much is homeowners’ insurance?
This is one of the questions frequently asked whenever homeowner insurance is discussed. The answer varies from one client to another and depends on many market factors. These include construction costs, contents, location, etc. For instance, if you are in an area considered risky, then the homeowner insurance is more expensive.
(4) Cruise Travel Insurance
Cruise vacations are a great time to get on board and enjoy scenic ports, wonderful activities, entertainment, incredible food, and many more. As amazing as the cruise holiday may seem, the last thing you want to worry about is any type of trouble. This is because many things can go wrong on a cruise. Whether you are young or old, and are planning to take a cruise vacation, it is no exaggeration that cruise travel insurance should top your preparation list.
Cruise travel insurance protects you from any unforeseen circumstances while on a cruise vacation. Some of the features of a travel insurance plan include legal expenses, medical expenses, lost or stolen luggage, cancellation & curtailment, holiday abandonment, and missed departure.
a) Reasons to get a cruise travel insurance
If you are insured and are involved in (i) a direct accident en-route your trip departure (ii) a serious injury or took ill during a voyage (iii) there is a natural disaster (iv) or theft, etc, your cruise insurance policy will provide adequate cover and save you thousands of dollars.
b) Purchasing cruise travel insurance plan
When you want to buy a cruise travel insurance plan, there are several options available. You can use the services offered by a third party insurance agent, a tour operator or those offered directly by the cruise line. Before signing up to a cruise travel insurance policy, ensure you know exactly what is covered and what is not.
Get quotes from several sources and make comparisons to choose the most competitive premium and coverage plan. Some travel insurance companies offer extensive coverage policies that will cover any unforeseen circumstances. These are usually more expensive since they will pay benefits under the widest set of situations. It is also always best to choose a travel insurance plan that is specially created for a cruise excursion.
c) Steps To Reduce Your Travel Insurance Risk
i. Book your cruise wisely
ii. Read the fine print on your travel insurance policy and your cruise agreement
iii. Have all your documents in place
iv. Assess the impact of seasons, like the hurricane season, Flu season, Norovirus season before you
v. Understand the acceptable behaviour on board
d) Am I Already Covered?
Before you decide to buy a travel insurance plan, ensure you absolutely need to buy it. You will not want to buy extra insurance when you are already covered. Some health insurance providers offer coverage regardless of your travel destination.
Note that Medicaid and Medicare do not cover medical services outside the United States. When you have put your money into your cruise holiday, make sure you get protected by getting the best cruise travel insurance plan.
(5) LIFE INSURANCES
Your family and loved ones are an important part of your life, and they deserve the best protection against financial instability. If you are concerned about the financial future of your spouse, family members or other people you care about, in case something were to happen to you, it is essential you consider a life insurance policy.
a) Why get life insurance?
The major and probably the only reason for life insurance is to replace the lost income of a deceased family member (the insured), where family members, spouse or children is dependent on that income. Life insurance holds your family together at a time when money should not be a concern.
b) Do I need life insurance?
If you are single with no debts and no dependents, then you do not need life insurance. If you are married and your spouse has a good-paying job that can sufficiently support himself or herself (and your children), then you probably do not need life insurance.
c) Buying a life insurance
Shopping for the best life insurance to protect your family and your assets can be like learning a new language. We have term life insurance and permanent life insurance (whole life insurance and universal life insurance).
- TERM LIFE INSURANCE
It is the easiest to understand life insurance policy. Term life insurance or temporary life insurance is paid to your beneficiaries when you, (the insured), dies within a certain specified period. It is generally less expensive with smaller death benefits.
It does not participate in company dividends, accumulate cash value and you cannot borrow against them. It rather allows you to get the right amount of coverage for the least expensive premiums available. Term life insurance can also be purchased on top of your permanent policy.
How much term life insurance do you need?
To know the amount of term life you need, ensure you add up the prospects of paying tuition, funeral costs, outstanding personal debt, mortgage debt, and other expenses that would drain family resources. Find out how much it would cost you for a single year and then multiply it by a factor between 5 and 10. That is how much of term life insurance you need to cover your family and all their financial expectations.
2. WHOLE LIFE INSURANCE
Whole life insurance is a kind of permanent life insurance policy. It will cover the insured for life, guarantees payout at the end of the policy and your cash value (saving portion) gets higher as time goes by.
Anyone can consider whole life insurance when the need for coverage is a lifetime. With this insurance policy, you are guaranteed money at the end of the road and your family will have the financial stability at your demise. However, your cash value is tax-deferred until the beneficiary withdraws it.
Kinds of whole life insurance that you can choose from include:
i. Single-Premium Whole Life Insurance
ii. Participating Whole Life Insurance
iii. Non-Participating Whole Life Insurance
iv. Limited Payment Whole Life Insurance
v. Level Premium Whole Life Insurance
vi. Indeterminate Premium Whole Life Insurance
3. UNIVERSAL LIFE INSURANCE
Universal life insurance is one of the different variations of Whole Life Insurance policy. It offers you (the insured) the flexibility to choose the kind of premium payment, amount of life insurance coverage as well as the death benefits. You can flex the benefits and premiums of the policy while the policy creates a residual cash value. This allows you to adjust the nature of your life insurance so that it remains steady with your actual needs.
BUYING UNIVERSAL LIFE INSURANCE
After you have decided to purchase universal life insurance, the first step is to determine how much coverage you can afford. To achieve this, you would need to get a universal life insurance quote. The quote will provide all the details you need about the insurance rates, exclusions, conditions and benefits for the policy you are considering. Decide on the amount you want to spend and you can add more coverage later if you want.
UNIVERSAL LIFE INSURANCE VS WHOLE LIFE INSURANCE
Both whole life insurance policy and Universal life policies provide you (the insured) with a guaranteed interest rate on the policy’s cash value. However, the risk of interest rate fluctuations obviously makes universal life insurance coverage less predictable compared to whole life insurance plans.
This irregularity is necessarily not a reason to avoid universal life covers. If you are mindful of the risk of a premium price increase and are ready to pay the increased premium amounts should the earnings fail to meet predictions, then universal life plans remain very effective.
TERM INSURANCE VS. WHOLE LIFE INSURANCE
If you are conservative, patient, and are able to continue paying premiums without any temptation to borrow from the cash value, you can consider whole life insurance. People with erratic budgets and circumstances are better off with term life insurance. It locks in their age and health, giving them the chance to invest the difference somewhere else.
Whole life insurance protects you right from the day you buy the policy until your demise. Of course, this means you would pay your whole life insurance premium every month. There is no length of time coverage to whole life. Most preferably, you should buy it you are young and your premiums will be low while you start building cash value.
Whole life pays dividends though not much. Once the whole life insurance plan has accumulated enough cash value, you can borrow against that cash value to cover some bills or to buy a house. The disadvantage of taking loans against the cash value of a whole life insurance policy is that it reduces the payout to your family should you (the insured) die.
Buying insurance is not always the most satisfying thing to do, but always worth the peace of mind, not to mention the protection afforded. When it comes to getting insurance to protect your assets, you can expect to get what you paid for in the end.
To choose the best insurance policy that will protect your assets, make sure you compare at least 3 insurance agencies. Read individual’s customer reviews, compare their rates as well as the coverage proposed. Your comparison effects can be applied to select which company mostly fits your needs. Send All Donations To: 2288 Gunbarrel Rd. Suite 154/388, Chattanooga, TN 37421 Or Our Cash App $LoyalDetermined
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