For some people insurance is a complicated necessity and they keep their contributions to a minimum. Others over compensate and tend to insure everything landing up with sometimes more than one life insurance, as well as some unnecessary ones such as: flight insurance, insurance on outstanding credit card balances, or insurance on appliances.
However, a good balance is to look at those insurances that, depending on your occupation and lifestyle, have real value in today’s modern world. There are five insurances you should carry to ensure peace of mind and compensation for life’s more likely events.
One: Life Insurance
If you are married or have dependents in your life, it’s important to see that they are protected should anything happen to you, and you are no longer around to care for them financially. Apart from assisting with loss of income for your dependents, life insurance can also assist with burial costs and help to pay off any debts you might leave behind. The single and childless person might not need life insurance, but everyone else with family should invest in a life insurance policy. It may be your parents, your spouse or your children that will need this help, especially elderly parents with medical needs, or children about to enter university. So it’s wise to Invest in a policy that will help to replace your income in the event of your untimely demise.
Two: Disability Insurance
The prospect of losing one’s income is truly frightening. Your income is everything. Lose that and problems arise with everything else. Disability insurance is there to replace a portion of your income in order to meet at least daily needs. It usually is set for a particular time period such as six months or a year – or can be paid in a lump sum. However, potentially life changing illnesses such as a heart attack, stroke or cancer may not be adequately covered by your disability insurance. If you are compromised by one of these serious illnesses, and cognitive impairment prevents you from looking after yourself, you may need long-term care at home or in a facility.
Long-term care insurance is an extra option you can consider taking out. But coverage for disability is probably the most important aspect of your insurance planning. It makes good financial sense whether you are single or married. Because no one knows what might happen tomorrow, and you can ensure peace of mind by covering permanent, temporary, partial and total disability. It’s a must-have if you hope to continue to enjoy your lifestyle even if you are no longer working.
Three: Health Insurance
Many personal bankruptcies are related to medical costs, which today are considerable. You must cover hospitals and surgery at the very least. Even simple visits to the family doctor can mount up to a hefty amount of money by the end of the year. Serious illnesses or injuries can result in a long hospital stay and the bill can run to hundreds of thousands of rands, certainly more than a week’s stay in a top luxury hotel!
While the premiums for your medical insurance may seem high, always calculate the costs of not having insurance. So even though your employer may provide health coverage as a benefit, it is important that you also have your own medical insurance to help cover some aspects that may not be covered by your company insurance, such as dental care and disability.
Four: House Insurance
If you own a home, then it is only makes sense to ensure it against damages of various kinds. Buying a home is probably going to be your biggest expense in life, therefore protecting it is essential. Replacing your home would be an enormous cost. And along with that insurance you should also insure the contents of your house – or particular items which would be very costly to replace if lost.
Check your insurance for standard coverage – and then consider what additional extras you might need: storm damage, fire, earthquake, flooding. Make sure you understand exactly what your policy covers. There is also insurance available to cover the cost of living elsewhere while your home is repaired or rebuilt. And remember to insure your home at the current cost to replace it. Some people leave the insurance at the price they originally paid for the property and then are shocked to discover that amount will only build one or two rooms at today’s prices!
Five: Car Insurance
For most people, their car is incredibly valuable to them. Whether you use it for pleasure, for social reasons or for work, most cannot imagine getting by without it. And in many countries, car insurance is required by law.
Should you be involved in an accident and someone is injured or their car/property is damaged, you may be subject to a lawsuit that could cost you millions. Accidents are part of life, and when they happen they happen quickly and the results can be life changing or result in death. Trying to save money by having only the barest minimum car insurance – or none at all – hardly saves you any money when you have an accident. Don’t put everything at risk through lack of foresight.
There are different types of car insurance, mainly:
- Liability:This insurance covers both bodily injury and property damage to other cars and people. It does not cover you or your passengers.
- Personal Injury:This will cover medical expenses related to yourself as the driver and any passenger injury.
- Collision:Here the focus is specifically on the damage done to your car, whether the accident was your fault or not.
- Comprehensive: Covers things other than collision and damage to other people, etc, but would cover damage to your car from an event other than an accident such as a street light falling on your car or your car being caught in flood waters.
- Uninsured or Underinsured Motorist:This insurance covers you if a driver hits your car but has meagre or no insurance at all.
Check your policies, check your life
VeriFi is an online tool that provides you with an immediate and up-to-date overview of all your life insurance and investment policies by sourcing information from all the major life insurance companies – and presenting the information in a comprehensive report.
With VeriFi you are able, for no charge, to access information on all your life and investment policies at a glance. You are able to check the types of policies you have, the names of the insurance companies providing the cover, the nature and extent of the insurance cover provided – and other vitally important information such as the details on your policies being correct.
To find out more, please visit: www.verifi.co.za