Everyone knows that the sole purpose of insurance is to protect individuals against unexpected financial losses during an event of illness, accident, or death but what is surprising is that, the majority of Americans are uninsured.
Are you insured? Are your near and dear ones protected against financial losses that could arise due to health related problems? If not, then it’s recommended that you first get to learn the purpose of having health insurance and how it can help you during major illness, disability, or death.
Insurance stands as the difference between knowing what you already have (i.e. good health and fitness) and what you want in case something happens to your health.
Here are eight things you need to consider when assessing your insurance needs.
- What you have at present
First, analyze what you have now. How much savings do you have in the bank? Do you have a regular source of income to meet your monthly expenses? Have you made smart investments in properties or shares?
What are the debts currently running? Do you have personal loans, mortgage loans, or any credit card dues? How much of the amount is yet to be paid? What happens to the debts when something unexpected happens to you?
Are you hit by any health issues like back pain, obesity, blood pressure, or heart problem? If so, make sure you purchase insurance plans before things go worse. It makes sense to check out reliable sources and find out whether you need to go for genetic testing or not. A healthy person gets up to 20% on premiums.
- Financial commitments
Ask yourself, how much money should you leave for your spouse and children to lead a stress-free life financially? If you don’t have children, how much will your loved ones require to meet their household and healthcare expenses? What are the significant future expenses they’ll need help with? Education, household, and healthcare are the major expenses for a family. In addition to these, there will be other costs like vehicle repair and maintenance, home renovation, and home appliances.
- Childcare and home duties
Childcare is another major scenario you need to consider when thinking about whether you should purchase insurance or not. How would you like your children to be cared for if you or your spouse meet with a major accident or disability or death? In most homes, the parents are the primary earning members, so when something happens to them, the life of their children will be bleak when there is no backup plan. The two best ways to offer protection to your kids are (1) having a caregiver to take care of them or (2) sending them to childcare. Try to come up with a rough estimate of how much that would cost.
- Living expenses
Coming to your personal expenses, ask yourself how much money you will need to take care of yourself when you’re affected by a threatening disease, illness, or disability? Also, consider the additional medical and caretaker expenses.
- Funeral expenses
Well, let’s hope that nothing of this sort happens to anyone at a young age or even middle age, but again this is one scenario that needs to be considered when assessing one’s insurance needs. The hard fact about funerals is that they are pretty expensive costing anywhere from $3000 to $5000 depending on how it’s done. Leaving your family behind with little or no financial support can leave them devastated in their toughest time. So, the funeral cost is something you need to think about as well.
In the event of illness, how long will you be able to survive without your working income? Again, this comes down to the savings you have at present and the returns from investments you’ve already made. If you haven’t made any, then it’s high time you purchased a suitable insurance plan to prevent any unexpected financial damage to you and your family in the future.
Make sure you are always covered!
Situations and financial status change from time to time, so ensure that your insurance needs are regularly reassessed, and you are covered accordingly.
Get expert advice
If you’re not sure how to get started, then getting in touch with an expert is the best way to go about it. Talk to multiple insurance agents and compare different plans before choosing one.