Key Takeaways
- Insurance helps reimburse us for the losses we incur over our lifetime.
- The two kinds of insurance cover us and our property. Life and health insurance covers us, and you can get insurance for any kind of property, for a cost.
- Choose higher deductibles to keep your insurance premium payments low, if it fits your personal situation.
You’ve seen those funny commercials for insurance where characters are destroying a house, or a car, and so forth, and we kind of laugh at the situation? Well, they have to make them funny because insurance can be a pretty boring area, and we hate paying insurance premiums, but we know it’s prudent to do so to cover our losses.
So, what’s insurance? It’s a contract set forth under agreement to indemnify or reimburse us for a loss for a specified period of time, for an insurance premium payment. There are two kinds of insurance: for us, and for our property.
Let’s take a look at us first:
- Life Insurance – this comes in two flavors. There is term insurance, where it’s a nominal cost to cover our life over a period of time. Then there’s cash value insurance, where there’s a higher premium payment that then accumulates money for some of your wealth accumulation goals.
- Health – There’s medical coverage that covers our doctors, hospitals, procedures and so forth. We might consider dental and vision coverage as well. Then there’s another area of health coverage which is disability or long term care This covers us should we become disabled or incapacitated and unable to handle things for ourselves.The second kind of insurance covers our property. There’s homeowner’s that covers your house, auto that covers your car, and personal property insurance that covers the property in your home or if you are renting a home. You can also get insurance to cover a motorcycle, a boat, or an airplane. The bottom line is that you can get insurance for anything, for a cost!
The second kind of insurance covers our property. There’s homeowner’s that covers your house, auto that covers your car, and personal property insurance that covers the property in your home or if you are renting a home. You can also get insurance to cover a motorcycle, a boat, or an airplane. The bottom line is that you can get insurance for anything, for a cost!
Speaking of costs, you want to keep those down. Consider high deductible payments where it’s appropriate, because you can save up to 50% of your premium costs by doing that. Don’t generally go for the low deductibles, because you are just going to trade dollars with the insurance company. Be sure to evaluate your personal situation to determine appropriate coverage.
Determining what insurance you need is about being prudent and making smart decisions about the coverages you need to cover the losses that may occur in your life. You want to successfully build your wealth over time, and making smart coverage decisions can help in that endeavor!
Until next time, enjoy.
Gary
