The Basics of Insurance

The Basics of Insurance

Insurance is a form of financial protection against the unknowns of life. By paying a set amount into a policy, the insurance agrees to assist in financial compensation. The policy is written contract that defines coverages in case of an accident. Coverages, deductibles (upfront portion you pay), and monthly costs vary from policy to policy and different types of insurances. The following is a brief overview of the different types of insurances and was designed only to inform the reader. For more information, please contact your insurance broker or financial advisor.

Automobile.
This is what likely comes to mind when you think about insurance. It is REQUIRED by law for all drivers to have in the state of Georgia. It’s broken down into three parts: liability, collision, and comprehensives. Liability insurance covers you for any injury you may cause to others. It is the most important coverage. Collision coverage pays for damages to your car, another vehicle, or fixed objects in the case of an accident. Comprehensive insurance covers you if you car is broken into or experiences damage due to natural causes like a hail storm. Uninsured/underinsured motorist coverage helps in the event that you are involved in an accident with an uninsured motorist. Car insurance coverage can be found in many different coverage increments. When it comes to your plan, consider what you are able to pay out of pockets for deductibles. It is recommended you purchase coverage above the state minimums, in case you get a serious accident.

Health.
The good thing about health insurance is, as of now, you can stay on your parents’ policy until the age of 26. The Athletic Association also covers most of your health costs while you are a student-athlete. Once you can no longer be on your parents’ insurance, consider your personal health history when making a decision about health insurance. Most employers offer health insurance. If your company does, check with the human resources department to educate yourself about company benefits. Understand your budget and what you can afford in deductibles. If you have a medication you take monthly or know you need regular medical attention, it’s important you factor these costs into your monthly coverage. Sometimes it is beneficial to pay more in monthly coverage costs to offset the costs of your prescriptions and doctor appointments.

Renters.
This insurance is fairly cheap (usually $15-$20/month) for the benefit of insuring your personal belongings if you experience a home break-in or a natural occurrence damages your apartment.

Homeowners.
Most brokers and banks require homeowners insurance when you purchase a home. This can be bundled with your existing insurance. Consider the location of your house when choosing your coverage. You might have different risk depending on the location and value of your home. Are you near water where flooding is a potential? Do big trees surround your home that could fall in a storm? Do you live in an area where hurricanes or tornados are a threat?

Disability.
Disability coverage insures a portion of your income in the event that you are injured or fall ill and are unable to perform the duties required
at your job. This is different than workers’ compensation, which is more for a temporary injury caused at work.

Life.
Life insurance is probably on the bottom of your list when you first graduate college; however, it’s something you should look into, especially if you have a family depending on your income. Often, you can purchase life insurance as a bundle with car and health, or some employers offer life insurance benefits. If you are interested in life insurance, look into term life insurance. Term life insurance allows you to purchase life insurance for increments of time (e.g. 30 years), and the policies can stack on top of one another. This is a more economical way to purchase life insurance.

 

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Posted on

March 27, 2017

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