Insurance is a vital part of your financial planning as it protects you and your assets. Unfortunately many people don’t take out insurance or they under-insure themselves, then when the unexpected happens they find themselves out-of-pocket financially and unable to recoup their losses.
Insurance allows you to protect yourself and your family from costly health expenses, protect your property, and to reduce your risk at different times during your life. Let’s look at the most common types of insurance and at what times during your life you could possibly need these.
Different Types of Insurance
To adequately cover yourself throughout your life you need to think about your personal circumstances, your assets and financial responsibilities and what would happen if you fell ill or lost your job. Then you need to ask yourself, “How would I cope? Could I pay my bills?”
While we all have varying circumstances due to family and the assets we’ve accumulated, some of the most common types of insurance needed are income protection, life and trauma cover, and mortgage protection, as well as home and content insurance, and vehicle cover.
When are These Types of Insurance Needed?
Insurance should be taken out when you acquire something of value that you want to protect financially. For instance, you typically take out life insurance when you start a family or income protection insurance when you start working and have financial responsibilities, such as loans that you need to pay for.
Home and Car Insurance – When you buy an asset, such as a home or car, you should reduce your risk and protect your financial interest by insuring your asset. Insurance should cover you for accidents, and depending on the cost of your asset, replacement value.
Life Insurance – It is suggested that you take out life insurance when you start a family. This insurance then gives your family financially security should you pass away.
Mortgage Insurance – This form of insurance should be taken out when you purchase property. Basically, mortgage insurance will enable you to cover your mortgage repayments should you find yourself in a poor financial situation. Thus, you are protecting your credit rating, and you and your lender from financial loss.
Income Protection and Trauma Insurance – When you acquire financial responsibilities and liability, it is recommended that you take out both income protection and trauma insurance. This then allows you to pay your bills should you lose your job or injure yourself.
Do you want to know more about insurance? If so, then contact eChoice and find the right financial protection for YOU.
Written by eChoice