Unhappy possibilities such as loss of income, death, sickness, accidents, damage to property and many more are tough to predict. Thanks to insurance, you can cover possible unfortunate events so that when they happen you can conveniently restore status quo. Below is a list of just four of the common insurance types:
1. Life Insurance – This is chosen based on the needs and goals of the owner. It is a contract with an insurance company that in exchange for premium payment, the insurance company provides a lump-sum payment to beneficiaries upon in insured’s death.
a. Term Insurance – The simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years.
b. Whole Life Insurance – It pays a death benefit whenever you die –even if you live to 100!
2. Homeowners Insurance – This covers both damage to your property and your liability or legal responsibilities for any injuries and property damages you or members of your family cause other people. It also includes damage caused by household pets.
3. Auto Insurance – This is a must-have. It is against the law to drive without some sort of coverage. It protects you against financial loss if you have an accident. It is a contract between you and the insurance company; you agrees to pay the premium and the insurance company agrees to pay your losses and defined in your policy.
4. Burial Insurance – It usually refers to a whole life insurance policy with a death benefit from $5,000 to $25,000. People purchase this type of insurance to provide money for funeral and burial costs for themselves and/or family members.
Raymond C. Lantz, Jr. is the president and founder of USA Wealth Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with Ray Lantz on WBSM 1420AM or on the Radio Pup app.