Finance and insurance are inextricably linked, because insurance is a part of any money management system. Whether it’s business finances or your personal finances, insurance can help you prepare for any kind of calamity. The difficult part is determining what kind of coverage you need, and what level of protection will be optimal for your personal situation.
For example, disability coverage is the most overlooked insurance by families in America, even though it’s cheaper than auto, home, or any other kind of coverage. Most employers do not provide long-term and short-term disability, yet the chance of an off-the-job illness occurring is significant. If a breadwinner is counting on Social Security Disability to support the family, he or she actually has a high likelihood of only receiving payments below the federal poverty line.
With auto insurance, the difficulty for most drivers is selecting the proper deductible. While a deductible of one thousand dollars or more will lower your premium, are you going to be able to easily come up with a thousand dollars if needed?
With life insurance, the main mistake that adults make is waiting until they are older or unhealthy. The right time to buy life coverage is when you are young, healthy, and have small children. You will find much more affordable rates than if you wait.
These examples illustrate how you can protect your personal finances by being proactive with your coverage. While insurance isn’t free, there are a host of tragic stories about families who did not have insurance when a disaster struck, and ultimately paid a much higher price.