Financial Goal Guide

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What You Should Know About Insurance

There are a multitude of different kinds of insurance available, and just about any person or organization can quickly find an insurance provider willing to insure them at a great price. The most popular forms of private insurance are health, automobile, homeowners, and Life insurance. All three kinds of insurance cover you for a variety of possible circumstances. There are other insurance options, but these are the most common. You may want to learn more about your options so that you can determine what kind of insurance you need for yourself.

Each kind of insurance has premiums and deductibles associated with it, but there are some ways to save money on your premiums and on your coverage. For example, by raising your deductible you can decrease the cost of your premiums and this is a good way to save money. Raising your deductible, however, means that you will have to come out of pocket should you need major medical care, which can be a costly expense.

Another way to save money on your premiums and on your policy limit is to buy term life insurance, rather than whole life insurance. By doing so, you do not have to pay the expense of a cash value account, and the policy limit is locked in at a set price for the duration of the contract. Also, term life insurance contracts do not require any kind of medical exam, so the premiums do not go up over time. If you purchase enough policy limits to cover all of your family’s needs, then you will never have to worry about it. However, if you do not purchase enough, you will end up paying very high premiums.

An insurance policy document is essentially a legal and binding agreement between the insurance provider and the policyholder. It stipulates how much the policyholder will be liable for if the insurance carrier or the company goes out of business. There are a few things that the policyholder must know. First, the sum assured must be equal to or greater than five hundred dollars; second, the total premiums paid must not exceed twenty-five percent of the total face value of the policy; third, it may only be used to pay for funeral expenses.

Other insurance expenses are commonly seen as risk factors. For instance, many people view the purchase of a home as a risk factor, since it increases the potential for gain. Risk factors are then assigned numerical values in order to calculate premiums, death benefits, or income tax benefits. Raising these risk factors would tend to lower the monthly insurance premiums.

Many insurance companies will offer discounts if the insured pays his or her premiums on time. Many insurers also offer discounts for multiple policies. Insured motorists often get discounts on car insurance, since the gas tax increases over time, resulting in higher taxes for drivers.