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Understanding the Need for Insurance: Do You Really Need It?


Whether it is auto insurance, homeowners insurance, medical insurance, or even life insurance, understanding what type and how much insurance you need, is important. Let’s face it; insurance planning should be apart of your financial plan. In regards to auto insurance, knowing the kind of auto insurance you need will help you save money. Looking at the age of your car, you can decide if you need full coverage or liability. Also, when it comes to auto insurance, you should have a clear understanding of what is best

for you when it comes to how much you are willing to pay for your deductible. Paying a higher deductible will lower the amount of your premium payments. Having auto insurance is not only the

law, but if you do not have proper auto insurance, you can be held liable for damages that exceed thousands of dollars.

Your homeowners insurance is something that should also be closely looked at. The amount of coverage you have on your home or your personal property will help you to determine if you need to make changes to your replacement coverage. As with auto insurance coverage, you should also look at the amount that you have listed as a deductible. Increasing the deductible amount will allow you to have a lower premium payment. In some cases, you may also be able to lower your replacement cost depending on the value of your home.

Many people don’t think it is necessary to have homeowners insurance, as they believe that nothing will happen to their home. Because we can’t predict weather occurrences or other accidents, when you don’t purchase homeowners insurance, you are essentially throwing money out of the window. Consider the number of homeowners in Chicago alone who have had problems with flooding due to some unforeseen circumstance with the weather. I’m willing to bet that people in these instances without insurance, wish they had it, and those who had it, were glad they

did. It’s like the saying says, it’s better to have it and not need it, than to need it and not have it. Insurance is there to protect you in case something ever happens. We can never say never. Because nothing has occurred at this point, truly does not mean or indicate that an incident will never occur. Even if you are a homeowner whose home is paid off, you still want to make certain that you keep up with your insurance payments (not to mention property taxes).

With the rising cost of medical insurance, this one item seems to be the factor that makes people stay at their existing job. The cost of medical insurance is astronomical. A single medical incident can possibly wipe out your total lifetime savings if you don’t have any insurance coverage. I myself recently had a medical incident and found that the amount of the doctor bill was extremely high. Having the proper insurance to cover my medical cost was a saving grace for me. If you are married and both you and your

spouse carry insurance, then the best thing you can do is look at the

policy that carries the best coverage and is least expensive. There is no need for both spouses to pay for insurance coverage.

There are many factors that you should look at when looking to purchase life insurance. One factor to consider is whether or not you have small children. If you do, maybe a term life insurance policy is good for you. If your children are now adults, you may look at limiting your insurance policy. Life insurance planning is a major component in building your financial plan, as it will help

you to leave an inheritance and give your family the opportunity to live financially stable.

Do not take insurance planning lightly. Insurance planning can make a great difference in how you succeed in life financially and will ultimately allow you the opportunity to make a positive impact in the lives of others, including your family and loved ones.


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 2020