INSURANCE & PROTECTION

Taking Care Of What’s Important

Life throws many unexpected things at all of us. While we usually can't stop these things from occurring, we can opt to give our lives a bit of protection. Insurance is meant to give us some measure of protection, at least financially, should a disaster happen. There are numerous insurance options available and many financial experts tell us that we need to have these insurance policies in place. Yet, with so many options, it can be difficult to determine what insurance you really need. Purchasing the right insurance is always determined by your specific situation. Factors such as children, age, lifestyle and employment benefits are all points to consider when planning your insurance portfolio.

There are however, Three insurances that most financial experts recommend that all of us have: life, health,and long-term disability. Each one of these covers a specific aspect of your life and each one is very important to your financial future.

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Life Insurance

The greatest factor in having life insurance is providing for those you leave behind. This is extremely important if you have a family that is dependent on your salary to pay the bills. Industry experts suggest a life insurance policy should cover "ten times your yearly income." This sum would provide enough money to cover existing expenses, funeral expenses and give your family a financial cushion. That cushion will help them re-group after your death.

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When estimating the amount of life insurance coverage you need, remember to factor in not only funeral expenses, but also mortgage payments and living expenses such as loans, credit cards and taxes, but also child care and future college costs.

LIMRA, formerly known as the Life Insurance Marketing & Research Association, says that if the primary wage earner dies in a family with dependent children that family will only be able to cover their living expenses for a few months and four in ten would have difficulty immediately.

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The two basic types of life insurance are Traditional Whole Life and Term Life. Simply explained, Whole Life is a policy you pay on until you die and Term Life is a policy for a set amount of time. You should seek the advice of a financial expert when planning your life insurance needs. There are considerable differences between the two policies. In deciding between these two, consumers should consider their age, occupation, number of dependent children and other factors to ensure they have the coverage necessary to protect their families.

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Health Insurance

A recent Harvard study noted that statistically, "your family is just one serious illness away from bankruptcy."  While the best option and the least expensive is participating in your employer's insurance program, many smaller businesses do not offer this benefit.

Finding affordable health insurance is difficult, particularly  if you have a pre-existing condition.

Long-Term Disability Coverage

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This is the one insurance most us think we will never need, as none of us assumes we will become disabled. YOf the population, 12% are currently disabled in some form and nearly 50% of those workers are in their working years.

Even those workers that have great health insurance, a nice nest egg and a good life insurance policy never prepare for the day when they might not be able to work for weeks, months or may not ever be able to return to the job. While health insurance pays for your hospitalisation and medical bills, where is money coming from to pay those daily expenses that your paycheck covers? Here are a few very sobering statistics regarding disability:

• Disability Causes Nearly 50% of all Mortgage Foreclosures, 2% are Caused by Death

• Close to 90% of Disabling Accidents and Illnesses Are not Work Related

If you are injured and off work for even three months, would you have enough in savings to cover your living expenses? Consider what you might face financially if you suffer a major medical condition such as cancer and were unable to work for over a year.

Many employers offer both short-term and long-term disability coverage as part of their benefits package. This would be the best option for securing affordable disability coverage.

A policy that guarantees income replacement is the optimal policy; more usual terms are replacement of 50 to 60% of your income. The cost of disability insurance is based on many factors including age, lifestyle and health. A small price to pay if you are faced with a devastating illness or injury. Disability insurance will guarantee that you will have some income when you can't work.