The Role of Insurance in your financial plan

Insurance is an important part of a sound financial plan. Various types of insurance help protect you and your loved ones against accidents, disease, disability and death costs in different ways. Add your insurance needs the decisions you make should be based on your family, age and economic situation. There are many forms of insurance and, unfortunately, there is no one-size policy. For example, life insurance can be a virtual necessity, especially if you have a spouse and kids. Disability insurance is important for everyone, which provides an income stream if you are unable to work. Most people require a certain amount of all these insurance categories.

Auto insurance: Shop carefully, but don't underbuy

Auto insurance helps to protect you against damage to the often-significant investment in a car and / or liability for damage or injury caused by you or someone driving your vehicle. It can also help cover expenses incurred by you or anyone in your car as a result of an uninsured motorist accident.

Homeowners insurance, for renters and owners

Insurance for homeowners should enable you to rebuild and refurbish your home after a disaster and help cover the costs of lawsuits if someone is injured on your property. To cover the cost of repairs, it is necessary to cover at least 80 percent of the replacement value of your home, minus the value of land and foundation.

Liability insurance: Protecting your assets

This often referred to as umbrella liability coverage takes effect when the coverage of personal liability and legal action in other policies is exhausted. The cost of $1 million in protection-especially necessary for high-income people and those with significant assets-can be only a few hundred dollars a year.

Life insurance: Your needs dictate the kind and level of protection

Life insurance, which is payable when you die, can provide the funds necessary to maintain your living standards to a surviving spouse, children and other dependents, can help repay debt and help fund education costs. Depending on your situation, the amount you need.

Health insurance: Available through your employer or privately

Most people benefit from health insurance as an employee benefit, often paying all or part of the premiums by their employers. Many employers have a choice between HMOs (Health Maintenance Organizations) and traditional service fee care. HMO rates are generally cheaper, but they have more constraints. Depending on such things as deductibles, coverage choices and location, private health insurance is much more expensive-often several hundred dollars a month.