Previously, I have talked about knowing where you are currently financially, planning and budgeting as well as managing your credit. Step 4 on your journey to improved financial health is insurance management. There are so many types of insurance that can impact your finances that there are too many to address in one article. Some examples are health, long-term care, dental, vision, auto, life, disability, homeowners’ and renters’ insurance. In today’s installment, I want to focus on only a few health, life and homeowners’ insurance.
Many individuals are offered health insurance coverage through their employer and may face limited options regarding the companies that could provide their insurance. Regardless of whether you are getting insurance on your own or through your employer a few decisions need to be made. First, you need to determine your family’s health insurance needs; i.e., what benefits do you definitely need for your family and what do you not necessarily need? For instance, if you have a family member that has chronic health conditions, you want a plan that will be able to cover the cost of the medications that will be needed. Another concern is whether you have a doctor in the plan that you feel comfortable with or if not, are you willing to pay more for a doctor that may be outside of the network of doctors?
Normally, health insurance plans have deductibles that must be met before payments will be made. Are you willing to pay more in an annual premium to have a lower deductible or are you willing to have a higher deductible in exchange for a lower premium? Every plan has some type of annual deductible. Additionally, when you visit a doctor there are co-payments required in most instances. Does it make sense to avoid co-payments by selecting only providers that do not require co-payments or do you want to be able to choose from a wider selection of potential medical providers? These are all questions you need to answer to not only improve your physical health but also your financial well-being.
Another common insurance consideration is whether you need to purchase life insurance. Not everyone needs life insurance. If you are single and have nobody that relies on you for support, then life insurance is not necessary. You can set aside funds for your burial or cremation. If you do have people that rely on your income, then life insurance protection is definitely something for you to consider. Shop around so that you are not paying more than you should.
The last type of insurance I want to address is homeowners’ insurance. For most people, their home is their most valuable physical asset. Despite this fact, many people are not fully aware of what is covered and what is not covered by their policy. I recommend that you become familiar with what is covered and what is not. It is not something we really want to think about but if you ever experience a covered loss or even worse a loss you thought was covered, you will appreciate knowing how much of a financial impact you may be exposed to. Do you know what type of coverage you have on your property? By this, I mean does your policy cover the full replacement value of your home or is there some other way the amount you could be paid in case of the loss of your home is determined? Are you aware of how much of your personal property loss is covered by your policy? If you have questions, contact the insurer to find out what the policy is saying and how the change impacts you. Don’t forget to consider changes/additions to your home that the insurer may not be aware of that could impact your benefit. Next week is the finale to this series.
Wayne J. Vaughan, author of Keeping Your Church Alive: Advice for Pastors, Leaders and Active Members.
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