Throughout your life, insurance coverage should be an integral part of your financial picture. We will look at a few types of coverage that will help you sleep easy at night knowing that you and your loved ones are protected against financial ruin.

Homeowners Insurance

Many people have much of their wealth in home equity. If this sounds like you, have you considered what would happen if a storm destroyed your home? You would be left with a huge deficiency in your net worth and you might still be liable for the mortgage! This is where your homeowner’s policy kicks in. A homeowner’s policy will pay for financial loss incurred due to damage caused to your dwelling.

An HO policy covers not only the structure of the house, but also

• personal property
• additional living expenses in case you are unable to live in the house due to an insured disaster
• medical payments coverage for medical expenses incurred because of injury on the residence.
• liability coverage to members of the household.

Renter’s Insurance

Even if you are not a homeowner, it’s important to protect your belongings. Very much like a homeowner’s policy, a renter’s policy covers the tenant’s:

• Personal property inside the house
• Liability coverage
• Additional living expenses in case the property becomes inhabitable

Remember that a renter’s policy doesn’t cover the property’s structure, except for any minor structural changes made by the tenants.

Medical Insurance

Ever rising health care costs make health insurance one of the most basic and important coverages to have. The costs of one uninsured illness, surgery or accident can leave a family in financial ruin. Most of you may be covered under your employer’s group plan. Self-employed individuals can also purchase medical insurance for themselves and their families and receive a tax deduction for it, a step by the government to make it more affordable to pay for it out of pocket.

You can typically pick an HMO or PPO health plan. The main difference between them is in terms of the doctors you have access to, depending upon whether they are on the provider list or not. You can also opt for an indemnity plan which allows you full access to doctors and services across the board.

Health Insurance policies typically require you to pay a deductible amount. Over this amount, depending upon your policy, you may be subject to a co pay, i.e. you are liable for a fixed percent of every invoice. Sometimes there is an out of pocket maximum which applies, beyond which the insurance company pays full 100% of payment.

Disability Insurance

The most valuable asset for anyone is they, themselves. It is an individual’s potential to earn, in the absence of which, they can face severe financial hardships. So, one of the most important coverages one can purchase is disability insurance.

Disability insurance provides payment in case of loss of income due to a disability, mental or physical, basically any condition that prevents you from carrying out work duties. You can purchase a policy to replace varying percentages of your income. Typically, policies provide for 45% – 60% of income replacement. The higher the replacement percentage, the higher the premium!

There are two main types of disability insurances:

• Short Term Disability – provides income replacement for up to 6 to 12 months.
• Long Term Disability – provides income replacement from 6 to 12 months to age 65.

Today, many employers provide disability policies at no extra cost to their employees. If you have the option to purchase a disability policy through your employer, you should not pass this up.

These are some of the insurance types we believe are crucial. Not only will they cover you in case of a financial disaster, they will also provide you mental peace, knowing you and your loved ones are well protected.