Insurance is a financial safety plan that will ensure you will have money if a particular financial crisis occurs. This will make your budget steadier in the event of an expense spikes. When negotiating insurance make sure it includes all that you want to cover.
Life insurance can vary depending on how much money you want to cover at the event of your death. You can get an insurance plan that covers the cost of your funeral and related expenses. You can also get a plan that will cover the cost of your families living for a year after your death. Below we list the main categories of insurance:
Term life insurance:
Covers you for a specific number of years then it expires. You will not get any money back that you put in. This is the cheapest type of insurance.
Whole life insurance:
The payments and amount given at death is fixed. The payments build value overtime and the account doesn’t have an expiration date.
Universal Life Insurance:
Payments and coverage is more flexible. The payments build value overtime and the account doesn’t have an expiration date.
Homeowner’s insurance provides money for damages to your property. If earthquakes are prevalent in your area, make sure your home insurance covers that. Below is a list of events that could be covered with homeowners insurance:
- Accidental discharge or overflow of water or steam
- Damage from aircraft
- Damage from or infestation of birds, vermin, rodents, and insects
- Damage from vehicles
- Earth movement (like an earthquake, landslide, or mudslide)
- Falling objects
- Fire or smoke
- Freezing of household systems like AC or heating
- Hail and windstorms
- Intentional loss
- Mold, fungus, and rot
- Neglect, deterioration, and general wear-and-tear
- Ordinance or law
- Riots and civil commotion
- Settling, shrinking, bulging, or expanding of your home’s foundation
- Smog, rust, and corrosion
- Sudden and accidental damage from artificially generated electrical current
- Sudden and accidental tearing apart, cracking, burning, or bulging of pipes and other household systems
- Volcanic eruption
- War, government action, and nuclear hazard
- Water damage
- Weight of ice, snow, or sleet
- Your pets and other animals
Renters Insurance provides money for replacing personal property caused by fire, theft, vandalism, and more up to the budget of your policy. The list below gives types of renters insurance that can be purchased:
Covers the cost to repair or replace your belongings (e.g. clothing, furniture and electronics).
Covers the cost of repairs for accidental damage of someone else’s property and the cost of medical bills if your responsible for someone else’s injuries.
Additional Living Expenses:
Covers the cost of living expenses (e.g. hotel, eating out) if your home is damaged and you cannot live in it at the moment.
Auto Insurance, Motorcycle and More
Vehicle insurance covers the cost of vehicle damage caused by you. It is also mandatory in the U.S. to have at least some insurance coverage if you have a running vehicle. Vehicle coverage will pay for your expenses caused by an accident that’s your fault, otherwise the other person’s vehicle coverage will pay for your expenses because it would be their fault. Below we list different types of vehicle coverage:
Pays for bodily injury (some medical expenses) and property damage when your involved in a vehicle accident with other people. Keep in mind that if the accident is not your fault the other person’s insurance will cover your costs.
Pays for property damages caused by you colliding your vehicle into something. For example, if you hit a guard rail, telephone pole, or a fence and your vehicle is damaged, collision coverage will pay for those expenses. Collision coverage also takes in affect with a car accident with other people involved.
Pays for damages that are not caused by a collision. For example, theft, fire, or other natural storms.
Medical Payments Coverage:
Pays for any immediate medical expenses caused by a vehicle accident such as going to the hospital and fixing any problem caused by the accident. However, this does not include extended treatment.
Personal Injury Protection (PIP):
Pays for long-term medical expenses (e.g. rehabilitation), work loss reimbursement, and funeral costs.
Uninsured/Underinsured Motorist Coverage:
This covers bare minimum costs of bodily injury and property damage caused in a vehicle accident. In some states this coverage is not enough legally.
Health insurance covers the cost of medical and surgical expenses. It is also currently mandatory in the U.S. to have it. You may be able to get insurance through your employer so make sure to ask before getting your own. Different types of health insurance are listed below:
Health Maintenance Organizations (HMOs):
Expect lower out-of-pocket payments. You have a more limited choice of physician, who will become your primary care physician, and you need a referral from your primary care physician to see a specialist to be covered.
Exclusive Provider Organizations (EPOs):
Expect lower out-of-pocket payments. Your physician choice is limited to the network and will have a designated primary care physician. This physician will have to provide a referral if you want to see a specialist.
Point-of-service (POS) plans:
Expect no insurance coverage on your primary care physician. On the other hand, you will typically have high coverage on referred specialist.
Preferred Provider Organizations (PPOs):
Expect higher out-of-pocket payments. Your physician choice and specialist choice must be in an approved network, but you don’t have to designate one physician as your primary care physician.
High-Deductible Health Plans (HDHPs):
Expect higher out-of-pocket expenses. After, the maximum out-of-pocket expense is reached plans usually pay 100% of the expenses.
Health Savings Accounts (HSA):
A tax-free savings account that is used within an HSA-compatible high deductible health plan to pay for qualifying medical expenses.
Dental plans are a lot like Health insurance plans. You can have a HMO (Lower cost within the limited network), PPO (higher costs, but have a broader network), indemnity fee-for-service plans (give more freedom, but cover a lower cost per visit), or a dental savings account (like a HSA). The following list is activities that dental insurance can cover:
- Checkups and other routine office visits
- Root canals and other endodontics
- Tooth removal
- Tissue biopsy and other minor surgical procedures
- Drainage of minor oral infections
- Root planning
- Management of acute infections
Small Business Insurance
There are multiple types of small business insurance that will ensure you will have money if a financial crisis, litigation expenses, or when other unexpected financial expenses occur. Below we list some small business insurances.
General Liability Insurance:
Provides money for damages caused by the business to employees/customers.
Professional Liability Insurance/Errors and Omissions Insurance:
Similar to general liability insurance but is specific to your profession. This insurance provides money for both defense and damages if the business causes or are alleged to have caused bodily injury or property damage to a third party, and negligence claims due to harm that results from mistakes or failure to perform. Some example professionals that have specific insurance for them include accountants, consultants, insurance agencies, lawyers, and real estate agents.
Protects a business from being sued by employees and their family members. Provides money for medical expenses to employees if they are injured on the job and death benefits to the employees’ family if they die on the job.
Provides money for replacing/repairing equipment, signage, inventory, and furniture in the event of a fire, storm, theft, vandalism, etc. It can also provide money for the interruption/loss of earning insurance if the business was unable to operate due to any of the events listed above.
Provides money for damage to your property or employees caused by vehicle accidents.