What are the Different Insurances and Why Do We Have Them?

We all know that we need to have certain types of insurances, but do we really know WHY we have to have them? Sometimes it is because the government tells us that we HAVE to have them. Other times, it is because it is for peace of mind of our family. Sometimes it is to prevent bankruptcy of ourselves or our business. In this article, I am going to outline several different types of insurance, both lines that we can and do insure and those we do not, just to help you understand better why you carry those lines of insurance. Quite possibly, you could save some money.

The big three that most people know are auto, home and health. These are what I will address first, in that order. Let’s talk about auto insurance first. Auto insurance is a requirement by the government, but this is for good reason. If you are not insured properly, the results could be disastrous. As the operator of the motor vehicle, you are responsible for any and all damages that occur in the event of an accident if you don’t have insurance. This is especially true in a no-fault insurance state. This can include vehicle and property damages, bodily injury, civil damages, and a multitude of court costs. If your vehicle is considered “totaled” after the accident, and you owe more on your vehicle than what it is worth, you want to make sure you have gap coverage included in your policy. Gap coverage picks up the difference owed to your lender. Otherwise, you will be responsible for this difference as well.

Home owners, or renters insurance, are policies that can be required by the government. Home owners is for sure. This is due to liability issues. If a child were to be running in the neighborhood, slip and fall on your property, break a leg, you are responsible. One would think that, instinctually, that the parents SHOULD be responsible, but that is not the way the law works. The owner of a dwelling must insure the property against all liabilities. Now, in the case of rental properties, the rental property owner would carry a liability policy, but the lessee would carry a rental policy to cover the belongings inside the unit.

Health insurance is just recently an insurance that the government has required people to start carrying on themselves. This happened with the Affordable Care Act. Health Insurance is very important, as without it, the costs of medical care could bankrupt you. Some may think that socialized health care would be a better answer. There is one big problem with this, doctor’s aren’t cheap to train. If you want socialized medicine, you are going to most likely have to spend at least two years in the military and pay at least 40-50% of your wages in federal income taxes. Most people in America don’t want to give up that much of their freedom. That is why they came to America. Most of us want low taxes and freedom. We want to pay for what we use, not pay for what everyone else uses. That is a European and Socialistic model. As we try to find remedies for the rising cost of health care, the premium and deductible costs continue to go up. These deductible costs alone can bankrupt a family.

This leads me into a type of insurance that are not required by the government, ancillary plans, like short-term/long-term disability, cancer, hospitalization, and various other plans such as this. These pick up, essentially, the costs of the deductible and the costs of living while you are “down-and-out” and incapacitated. These prevent help you to make ends meet and prevent bankruptcy.

Life insurance is another type of insurance that many people know very little about. To some people, it is kind of a taboo word. When in all actuality, it can be a great way of Future Planning. Depending on the product chosen, most Whole Life products will grow at a nice rate throughout your life with a guaranteed payout if needed, in the event of your passing. If not needed, at the time of a certain life event, such as retirement, they can be converted into an annuity. An annuity continues to let these monies grow or at least maintain their value while paying out.

Funeral Planning insurance is a type of life insurance dedicated to the event of one’s passing. At Asher Custom Benefits, we even work with a team that at this time will work with the local funeral homes to get you the best prices without you even knowing, to save you the most money, keeping the most for your beneficiaries and your estate.

This just scratches the surface of what the insurance market is about. Let’s see what questions arise from this.

As always, feel free to contact us with any questions you may have. We are here for you!

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