Ensuring Your Future: How Insurance Protects Your Finances

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Life occasionally throws us unexpected curve balls. Whether it’s a hail storm, a car accident, or a health issue, there are some things we just can’t see coming. When they occur, these curve balls can either be met with a strike or a solid hit. I would prefer the solid hit in these instances, and one way to assist in being prepared for these unexpected life events is through insurance.

Insurance (simply explained here by The Money Advice Service) reduces our level of financial risk when a curve ball comes our way by helping us pay for the loss of items from theft, damage from weather, accidents, or unexpected medical expenses, among other scenarios. There are many different types of insurance, ranging from life insurance to auto insurance and even pet insurance, that cover different aspects of our lives. The insurance coverage you need depends on your unique risk factors and stage of life.

Be Prepared for the Worst

HEALTH INSURANCE

Any number of medical issues can arise that put a significant drain on your bank account. This can result in medical expenses that many cannot afford, at a time when making money may be difficult or impossible. Health insurance assists in covering these expenses as well as providing peace of mind in cases where hope is difficult to find.

With the Affordable Care Act (Obamacare) has come many changes to the ways people seek health coverage. One important change to be aware of is the penalty for those who remain uninsured. This makes it more important than ever to enroll in a health insurance plan. Insurancequotes.com provides a handy calculator to help you determine what the penalty may be if you choose to go without health coverage.

HOME INSURANCE

For many of us, our home is our biggest investment. Most mortgage lenders will require home insurance as a provision for providing a loan. When making such a large investment, it’s important to consider each home’s unique risk factors to ensure that you’re covered against events that may compromise your home. CNN Money provides a list of helpful tips to consider when shopping for a home insurance policy, including:

You’re a statistic.

To an insurer, you’re not a person; you’re a set of risks. An insurer bases its premium (or its decision to insure you at all) on your “risk factors,” including your occupation, who you are, what you own, and how you live.

Given this truth, consider how to lower your risk factors. An up-front investment in storm shutters or stronger roofing materials may pay itself off over the lifetime of an insurance policy. Similarly, an alarm system, smoke detectors, and even dead-bolts on exterior doors may lower your insurance costs. Shop around and ask your potential insurance providers what kind of discounts they offer to homeowners who are proactive about mitigating risks. You may be surprised at your options!

LIFE INSURANCE

Life insurance is one form of insurance that many find very crucial to attain, especially after marriage and parenthood. Life insurance protects your family’s finances in the event of an untimely death. According to Payoff Lift, the top five reasons why you need life insurance are as follows:

  1. To protect your family and loved ones.
  2. To leave an inheritance.
  3. To pay off debts and other expenses.
  4. To add more financial security.
  5. To bring peace of mind.

These are good reasons to have any kind of insurance (1, 4, & 5 especially), but life insurance in particular is a way to ensure that your dependents will be taken care of in the event that you are no longer around. This is especially true if you have debt that could be damaging if passed along to your family. I know this scenario is difficult to face, but it becomes easier when you know you’ve done your best to provide for those who care for you the most.

Find Your Peace of Mind

When life throws you a curve ball, you have two options. You can sit back and let the ball take control, or you can hit a home run. Unexpected life events are never easy, but insurance coverage puts you in a stronger position to handle these events and to come back from them even stronger than before. As importantly, insurance provides peace of mind. There’s no need to fear the unknown when you’ve planned ahead and know you’re covered.

How does insurance coverage provide you with peace of mind? Share your thoughts by tweeting us @Lindsey2Wealth!

Please Note: Guarantees are backed by the claims paying ability of the insurance company.

(photo credit: elitedaily.com)