Thank you to Dave Ramsey’s Endorsed Local Providers program for sponsoring this post!
Insurance – you hate paying for it, but you sure are glad to have it when things go south. Am I right? For most people, the very thought or utterance of the word insurance sends them into a tailspin, but honestly it doesn’t have to.
There a zillion and one different types of insurances out there and honestly, not everyone needs to have every single different kind. In fact, you may only need one, but how do you determine that?
First, there are two kinds of insurance that I truly believe are nonnegotiable, which means you must have at least these two-types of insurance…
Renter’s or Homeowner’s Insurance
To help you figure out if you need any additional insurance, answer these questions to determine which insurance may be right for you.
Does anyone depend on your income (significant other, children, etc.)? (**Stay-at-home moms, this includes you. Even if you are not earning an income while raising babies, your family would have to supplement the money saved – i.e. in childcare costs, should something happen to you. This is the income you bring to the table so make sure your family is set should something happen to you.)
Yes – you need life insurance.
Do you own a car or borrow one regularly?
Yes – you need auto insurance.
Would you struggle financially if you were injured and no longer able to work?
Yes – you need disability insurance.
Would nursing home costs wreak havoc on your finances?
Yes – you need long-term care insurance.
Do you have substantial assets (like property)?
Yes – you need umbrella insurance.
Okay, so that definitely doesn’t cover all the different types of insurances but it covers the big ones. I get asked about pet insurance almost weekly and honestly, I don’t think it’s worth it. We have a dog and have had dogs for the last 11 years, but we’ve never had pet insurance.
Now, let’s talk about the different ways to get this insurance that you need.
Step 1: Check with Your Employer
Many companies offer an assortment of insurance packages that you can choose from. For example, through my husband’s employer, we have our health, and my husband’s disability and life insurance policies. So, your first step, if you work as an employee is to check with your Human Resources department to find out what types of insurance they offer.
***When reviewing a policy through your employer, check to see if it is portable (this means that it will follow you even if you leave your current job). Most policies through employers are not portable so it is definitely something that you’d want to be aware of before leaving a company.
Step 2: Find an Agent
If your employer doesn’t offer the types of insurance you need, or you’re just not satisfied with what they do offer, your next step is to find an agent. I know, I know, it sounds difficult but I can assure you it’s not. The one main key to remember here is that any agent you do choose to go with needs to be an independent agent with an insurance brokerage firm who can recommend policies from a wide range of companies to help find you the best value for your situation.
Where to Find an Agent
Referrals: ask your friends and family for their agents’ names and if they are willing to share, the different types of insurance policies they have with them. Just make sure that any agent you do choose is licensed to sell insurance and is certified.
Online: if you really want to, you can spend an entire day online submitting requests for quotes from the numerous different insurance sites out there. Or, you can simply do what I did when I needed to purchase my life insurance policy, I went through Dave Ramsey’s Endorsed Local Providers program, which hooked me up with several different independent agents in my area. Easy peasy.
Step 3: Compare Policies
Unfortunately, insurance is something that you need to shop for – don’t just go with the first policy you see. I had my life insurance policy re-written three times before I signed off on it. This is something that you want to compare with your other quote options. In addition to price, you’ll also need to make sure that whatever insurance company you go with is trustworthy and financially sound.
Look up their S&P or A.M. Best ratings (AAA is the highest given by S&P and A++ is the highest given by A.M. Best). You’ll also want to make sure that their level of service is up to your standards. With a previous insurance company, we failed to do this and it resulted not only in terrible policies that could have wrecked us financially but also many unanswered phone calls and unreturned messages.
Insurance doesn’t have to be scary or icky, in fact if you take the time now to ensure that you’re properly covered, you and your family won’t have to worry when something does happen.
What is your best tip for choosing the right insurance?
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Insurance is SO important. When I see couples or parents without life insurance in particular it just kills me! It’s really a must if you have kids.
I couldn’t agree more Natalie! I don’t think people realize just how expensive funerals are until they are actually having to pay for one. It’s definitely a burden that shouldn’t fall to your loved ones.
I’m a huge believer in insurance. It is just a peace of mind. However, before purchasing anything you must do your research and read all the terms and conditions carefully. The key is to have complete understanding what it covers, how and when.
It’s not pleasant to think about, but having insurance really helps me sleep. We have health, homeowners, car, and life for my husband, the primary earner, but I would also really liketo get disability insurance for him. We once got some very expensive quotes, but I think we need to visit it with another agent…
My best tip for searching out insurance, might I add I AM an independent agent, is to make a list of ALL of your assets.
Many times people come in and have no clue how much coverage they need. Look at it this way, if your house burned down today, what would it take to replace your home itself, AND your contents? Think about replacing everything from beds to salt and pepper shakers.
Also, it’s a great idea to walk through each room and take photos of what is in the room at least once a year. It’s hard to remember everything in the room if you have a robbery or a fire. Your agent will happily store those photos for you.
Thank you Jill for this! You’re so right – keeping a list of your assets definitely makes the insurance process easier….learned that one the hard way. lol
You are very welcome! Any time!
This is some really good information about getting insurance. It is good to know that I should consider finding an agent to help you out. That does seem like a good way of knowing what your options are.