You can’t always stop bad things from happening, but you can be protected financially when they do. When you buy insurance what you’re really buying is something that you hope you’ll never have to use. But if you do, you’ll understand why having the right type and right amount of coverage is so important. The following information will help you make better insurance choices for yourself and your family.
DECIDE WHAT TYPE OF INSURANCE IS NEEDED
It seems that there’s an insurance product for just about anything these days, and there is. With so many different options, it’s easy to get confused about the different types of insurance and when they will or will not pay. Write down your short-term goals and your long-term goals, and then schedule an appointment with a licensed insurance broker. Any experienced broker can recommend the right products to help you reach your goals.
DETERMINE HOW MUCH INSURANCE IS NEEDED
How much insurance to purchase depends upon many factors such as how much you owe, how much you own, and how much out-of-pocket cost your family could afford to bear. Anyone can estimate coverage needs using online calculators or worksheets, but it’s always a better idea to sit down with an experienced broker who can thoroughly evaluate your needs and recommend appropriate amounts of coverage.
COMPARISON SHOP
All policies are not equal. This is why using an independent insurance broker is so important. An independent broker is not obligated to any one company. Rather than try to convince you that a particular company or product will fit your need, they are free to comparison shop and recommend a variety of companies and products, truly offering you the best combination of coverage, value, and service.
No matter the type of coverage you need, the process is essentially the same:
- Decide what type of coverage to buy
- Decide how much coverage to buy
- Request your quotes
- Decide which company to buy from
UNDERSTAND WHAT YOU’RE BUYING
An insurance policy is a legal contract between you and the insurer and usually comes loaded with technical terms that may be difficult to understand. Don’t guess and don’t assume! If you’re having trouble understanding the language of the policy then call your broker, or even the insurer, directly. They can explain the technical terms in a way that’s easy to understand.
EVALUATE YOUR INSURANCE NEEDS PERIODICALLY
As your life changes so do your insurance needs. You should schedule a review with your insurance broker annually or whenever you experience a major change in your life. Here is a short list of times when you would want to consult your broker:
- Getting married or divorced
- Childbirth
- You’re renting an apartment.
- You’re buying a house, a car, or other major purchase
- A child is going off to college
- Changing jobs or becoming self-employed
- Buying or selling a business
- Your income increases or decreases substantially
- Retirement