| By :
Michel Maling
What type of insurance do I need? Am I under or over insured? Am I wasting money by purchasing insurance? You may wonder about these things and wonder if it is necessary to take out any insurance at all, but you need to ensure that you are prepared for all that life deals you in the future. In exchange for this peace of mind, you will need to part with some of your hard earned cash each month. There are many different types of insurance that you can take out according to your needs, but they are mainly divided into two groups. 1. General or Short Term Insurance Short term insurance includes things like your car and your household contents. If for instance your car is stolen and you are paying it off, you won't need to carry on paying it off for years to come without having the benefit of driving it. Your short term insurance will also cover things like lightening strikes. If your Television is blown up, your insurance will then have to replace it for you. If you own a car, you will definitely need insurance to cover you and anybody you crash into. Medical aid is another sort of policy that everyone should have, but if you are young and healthy, a hospital plan should be adequate. 2. Long-Term Insurance This type of insurance includes your life insurance and things like income protection in the event of becoming disabled. This type of insurance will also help your family out should you die. At least they will be taken care of. If you have family who depend on you, you will need to take out life insurance. You will need to take out a good policy, especially if you have a big debt like a home loan. If you are free of beneficiaries and have nobody who needs to be looked after should you die, you may not need to worry about this type of insurance for now. As an individual, you need to develop a clear picture of your risks and needs and look for an insurance package that suits you best. Make sure you know all the terms and conditions of any insurance that you do take out up front, so that you don't get any nasty surprises when you need to claim. When opening your insurance, make sure to ask the following questions: What exactly does the policy cover? What exactly does the policy exclude? What are the rules of the policy and what conditions do you have to fulfil? When does the policy become effective? What type of annual increases can I expect? How do I make a claim? If you let the policy lapse, are there any penalties? On the other hand, it is quite possible to over-insure yourself, and spend money on insurance products that you don't really need. The best way to know for sure is to enlist the help of a financial advisor, and in this way you will have peace of mind without paying the earth.
|
![[Valid RSS feed]](http://www.articlesbacklink.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
