Insurance is a way to protect yourself, your family, and your finances in case of an accident, illness, or disaster. Many types of insurance are available and may be more or less important at different stages in your life. Here are several different types of insurance and when they might be of value to you.
AUTO
If you own a car and live anywhere except New Hampshire, you must purchase auto insurance. Basic policies provide coverage for property damage and personal injury in case of an accident. Additional options may include towing, road-side assistance, or rental vehicle costs in the event your vehicle is in the shop for repairs.
GAP (Guaranteed Asset Protection) Insurance is a separate type of vehicle insurance that may be good to have the first few years you own your vehicle. If your vehicle is totaled in an accident and you owe more on your loan than the vehicle is worth, GAP insurance will cover the difference.
HEALTH
While the purchase of health insurance is no longer required in most states, it’s a good idea for most people of all ages. Health insurance can save you money by covering preventative health care and getting you reduced costs for medication and approved medical services. The average price of a visit to an emergency room is $600-3,000 depending on where you live. Should you need surgery, even the most basic procedures can run upwards of $10,000.
HOME/PROPERTY (Renters or Home-owner)
If, like most people, you’ve borrowed money to buy a home, your lender will require you to purchase insurance for your property. The coverage will provide financial payment in the event your home is damaged or destroyed. Home-owner’s insurance typically provides coverage for your primary structure, secondary structures (like a garage), and for the items inside your home that get damaged due to fire, storms, vandalism, theft, etc. Note that many policies do not include flood insurance which could include leaks into your basement after an especially severe storm or breakage of a water pipe.
If you don’t own a home, you may want to consider renter’s insurance which provides similar coverage for your personal property damaged or stolen within a rented dwelling.
DISABILITY
If you would be unable to pay your bills and cover cost-of-living expenses if you were injured or ill and unable to work, disability insurance might be right for you. Disability insurance can be purchased to provide a percentage of your income while you are out of work. Disability insurance is usually purchased through someone’s employer but can also be purchased on an individual basis.
LONG-TERM CARE
Long-term care insurance provides payment in the event you need at-home care or care in an assisted living facility, nursing home, or hospice facility. It is currently estimated that 50% of Americans will need long-term care during their lives. The price of long-term care insurance increases as you get older so you might want to start looking into your options before your 50s.
LIFE
Life insurance needs change throughout your life depending on your situation. It is designed to provide a financial payout to those who depend on you for income or to cover large debts in the event of your death. The price of insurance also changes throughout your life, with it becoming increasingly expensive as you get older. If you are married, have dependents, run your own business, or have a lot of debt, you should review your life insurance once a year to ensure you have the coverage your family needs.
LOAN
When you have significant debts — including auto, home, or credit card debt — loan protection may make, wave, or cancel your payments for you in the event you are unable to pay due to loss of employment, illness, disability, or loss of life. GE Credit Union offers loan insurance on all of our lending options. The price will be billed each month as part of your loan payment and can be cancelled at any time.