Insurance Policies You Should Have

One of the biggest financial mistakes that people make is to not have enough insurance coverage. Many individuals and families find themselves in poverty because they lack certain insurance policies. Some insurances policy most people need include:

Disability Insurance

Those silly AFLAC TV ads with the duck are actually sending you an important message. The message is that you will need some way of paying the bills and the food if you cannot work because of injury or illness. Health insurance will only cover your medical costs it will not pay the mortgage or the electric bill. Social Security Disability payments are only available if you become permanently disabled.

You should have a disability policy that will cover the cost of your day to day living expenses. If you work full time check to see if long term or short term disability insurance is available as a benefit and take advantage of it. If you or self employed or can’t get through your work buy your own disability policy.

Homeowners or Renters’ Insurance

The insurance you purchase with your mortgage will only reimburse your mortgage company not you if something happens to your home. If you rent your landlord’s insurance will not cover the loss of your possessions. Homeowners will need to get a policy that covers the contents of their home. Renters will need a renters’ policy that covers their possessions. Make sure the policy covers all the risks common in your area.

Life Insurance

Many people believe that life insurance is only for those who have children or other family members to support. The truth is almost everybody needs life insurance. It will pay off your debts if you die. Without life insurance your heirs or loved ones could end up having to pay your debts if you die unexpectedly. Something to remember is that life insurance policies are tax deferred so you can deduct from your income tax. It can also be used as an investment.

Long Term Care Insurance

The biggest insurance mistake made by older people is not to have long term care insurance. Such a policy covers the cost of nursing home care, assisted living facilities or in-home nursing care if somebody requires it. Many older people end up selling their homes or using their savings to pay for this. Nursing home and long-term nursing costs are not covered by Medicare. Medicaid will cover some of these costs only for lower income people. For persons over 70 and those in poor health long-term care insurance is a must.

Health Insurance

The national health insurance program in the US, Medicare only covers those over 65 and some disabled people. The other government healthcare program Medicaid only covers the poor. Most residents of the US will have to purchase some sort of health insurance policy. Even those eligible for Medicare will need coverage for expenses covered by the program.

Contrary to popular belief President Obama’s healthcare reform will not provide health coverage. Instead it will penalize people without private health insurance when it goes into effect in 2014. Therefore most residents of the US will have to purchase health insurance after 2014.

If you are traveling outside the US you will need to purchase travel health insurance. Many health insurance policies will not provide coverage outside of the country. Government health insurance programs in countries like the UK will not cover traveling US citizens.

Steven Hart is a freelance writer and a Financial Advisor from Cary, IL. He writes about Annuity topics like Annuity Definition, Annuity Rate, and Best Annuity Rates.

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