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All the below points needs to be hyperlinks, as and how the user would click on them the explanation must come on the screen.
Insurance Basics
Do I need insurance?
What things should I insure?
What kinds of insurance should I avoid?
Shopping for insurance - where do I start?
Where should I purchase insurance?
Is price all that matters?
How important is having an agent?
Irrespective of how well you plan your financial positions, failure to purchase suitable and appropriate insurance will always leave you worried. On the other side of the coin, few things will attack your investment returns more than paying too much for insurance or, worse, paying for insurance you don't need.
So, you may be thinking now, "I don't need insurance." To that we say: Most likely you do. If you own things that will be very hard to replace without facing severe financial hardship, these things ought to be insured. In general, think of insurance as the most important protection that you can give yourself and your family.
Insurance is one finance topic that you don't want to overlook. Contrary to some common perceptions, insurance is not a rip-off. For most people, it is a necessary and valuable financial service.
What types of insurance do you need?
How much insurance do you need?
How do you get all of this coverage at the lowest cost?
How are you feeling today? Good or Excellent. I hope you do but will you be able to tell me how you will be doing in a year’s time? Can you afford to take this risk and put so much pressure on you and your family? For all the answer is “no”.
How about your life? If you were to die suddenly, what kind of financial hardship would result? Would there be dependents left without basic support? Would your burial costs impose undue hardship on others? Morbid as they are, these questions are at the root of life insurance decisions. If there are people who can't afford to lose you, you should buy life insurance.
Sometimes, you buy insurance to protect lending institutions. If you have a home mortgage or a vehicle loan, you have little choice. The lending institution will force you to get insurance and will dictate the coverage levels. In this case, it's not your financial hardship that lenders are nervous about; it's their own. You have their money, and if you can't pay them.
In the same way, private mortgage insurance (PMI) protects the lender, not you, should you default and stick them with a house worth less than the balance of your debt.
Insurance agents may have a less-than-golden reputation as a group, but when you think about it, this stereotype is mostly based on sales practices. Nowadays, with Internet resources at your disposal, you can educate yourself to avoid shady sales practices and select an agent that offers real value. It comes down to personal preference.
Term life insurance is cheap and simple enough that most people can make an educated purchase, start to finish, on the phone from a insurance provider. On the other hand, long-term care insurance is about as new, complicated, and expensive as it gets. Even after extensive Web research, many people will still benefit from the services of an independent financial planner, particularly one with experience in long-term care issues.
They aren't all that complicated, but they are much more likely to lead to a claim than life insurance. When it comes to making a property claim, an effective local agent can be worth her weight in gold. Also, with liability and medical claims, procedures can be very tricky and decisions are rarely clear-cut. A proactive agent can be an invaluable guide. Of course, it always depends on the agent, the circumstances, and to some extent, the way the company handles claims.
In addition to the traditional insurance agent, there are a few other options. An independent insurance agent represents a number of insurance companies and can more objectively weigh pluses and minuses across many companies and types of insurance.
A good financial planner can build insurance into your overall financial plan, should you or your situation call out for a professional. The key here, again, is independence. Work with a fee-only financial planner.
An agent can also help you with an annual insurance review. As your life situation changes, so do your insurance needs. Probably the simplest example is life insurance. The bottom line is that most people need less life insurance every year, as they build savings and approach retirement. On the other side of the coin, most people don't need any life insurance until the baby arrives. You might want to drop collision and comprehensive insurance when your car reaches "licensed battering ram" status. And so on.
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