Mitigating Risk with Insurance

Insurance is a way to mitigate risk; it is about securing your life, family, and assets. There are many different types or insurance, and you probably won’t need them all.

Some common types of insurance and what they cover are:

Auto Insurance

  • Liability Coverage pays for property damage and or injuries to another person caused by an accident in which you are at fault.
  • Collision Coverage helps to pay for the cost of repairs to your vehicle if it is hit by another vehicle. 
  • Comprehensive Coverage helps pay for repairs to your vehicle if it is stolen or damage in an incident that is not a collision.

Homeowners Insurance

  • This is a policy that pays for repairs to a home or replaces the home or belongings if they are damaged by something like fire or theft.
  • This type of policy may also cover costs if you accidentally damage another person’s property or if a visitor is injured at your home.
  • Personal property coverage protects your belongings in the home, and a homeowner’s policy may or may not include this type of coverage.

Renters Insurance

  • When you rent versus own a home, this type of policy protects the renter’s personal property within a rental property.
  • Renters insurance may also cover liability in the event that a visitor is injured on the property.

Health Insurance

  • Policies are designed to reduce the financial impact for expected and unexpected medical expenses.
  • Policies often cover preventative and catastrophic medical expenses.
  • Up to the age of 26 in most cases, a person can stay on their parent’s health insurance plan, depending on the family situation and/or needs.

Life Insurance

  • Policies protect families and businesses if a key income provider passes away.
  • Life insurance may also pay for funeral and burial costs.

Other Types of Insurance

  • Liability Insurance is usually obtained by independent contractors to cover work related accidents.
  • Travel Insurance is designed to cover a variety of risks while traveling. It can cover medical expenses, lost luggage, or flight cancellations.
  • Long-term Disability Insurance is designed to pay a portion of your salary should you become disabled due to an injury or accident. 
  • Long-term Care Insurance is coverage that provides nursing home care, home health care, and personal or adult daycare for individuals aged 65 or older.
  • Umbrella Insurance is an extra layer of protection that can be added to existing insurance to address specific liabilities.

When choosing a career, you may also need to consider different types of insurance. Here are a few examples of professionals who need insurance to perform their job:

  • Professional Athletes – can earn millions of dollars during their career, and an unexpected injury, accident, or illness can cut off this income stream, resulting in financial catastrophe. 
  • Healthcare Professionals – are required by states to have current malpractice coverage to work in hospitals and other medical facilities. Malpractice insurance is usually based on the physician’s specialty and geographic location. 
  • Independent Contractors – can be sued and held liable for damages. Contractors can be sued for damaging property, causing bodily harm, or slander, and insurance helps cover legal fees and damages resulting from a lawsuit.

Insurance can be complicated but there are insurance agents to walk you through the process. Be sure to ask a lot of questions about what types of insurance and coverage you need. 

Many insurance companies allow you to get an insurance quote and purchase a policy online. When you buy insurance directly from the company, you may get coverage quicker. However, if you buy insurance directly from the company rather than going through an agent, you will not get the personalized experience an agent can give you. 

An agent will evaluate your insurance needs and help you find one or more policies that meet your circumstances. Insurance agents are most likely local and experienced in the needs of your area.

No matter whether you buy your insurance online or through an insurance agent, the important thing is you want to have the most valuable coverage for the most affordable price. 

Remember, that once an insurance policy is enacted you will need to make sure that you periodically review and update the coverage as your needs and circumstances change. Your need for insurance coverage will change over time – you may need more or you may need less, so updating your coverage is important. 

A Journey to Personal Financial Success

At Morgan Franklin Fellowship (MFF), we support the concept of financial freedom – by teaching participants how to save by paying themselves first, invest for their future and grow their net worth.

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