Financial Web
> Group Life Insurance
> Lowering Your Life Insurance Rates
> Choosing Individual and Family Health Coverage
> Preparing for Your New Motorcycle
> You CAN Lower your Premiums
> Finding Affordable Health Insurance
> Policy Continuation Options
> Bundling your Insurance with one Company
> The High Price of Health Insurance
> Is your Homeowners Insurance Sufficient?
> Permanent or Term Insurance: Which should you choose?
> The Necessity of Health Insurance
> Buying Homeowner's Insurance: A Process
> Sports Car Insurance
> 15 Ways to cut Your Medical Costs
> A Few Words About Dental Insurance
> Annuities
> Auto Insurance - What do You really Need?
> Annuity Options
> A Life Insurance Primer
> Beware of Unfair Trade Practices
> Blended Life Insurance
> Be Aware of these Life Insurance Clauses
> Blue Cross and Blue Shield
> Beneficiaries and the Uniform Simultaneous Death Act
> Consolidated Omnibus Budget Reconciliation Act (COBRA)
> Credit Insurance
> Comparing Life Insurance Policy Costs
> Coordination of Benefits
> Control what You Can
> Characteristics of Insurance Contracts
> Compare when Buying Auto Insurance
> Disability Insurance
> Disability Insurance for Businesses
> Endowments
> Examining Annuity Premiums
> Flexible Life Insurance Policies
> Glossary of Insurance Terms
> Government Health Insurance
> History of Insurance
> HMO vs. PPO
> How Your Insurance Premiums are Calculated
> Homeowners Insurance
> Insurance Beneficiaries
> If You’re Involved in an Accident…
> Immediate and Deferred Annuities
> Insuring Your Teenage Driver
> Insuring Your New Motorcycle
> Know your Car Insurance Policy
> Long-Term Care (LTC) Insurance
> Life Insurance in Business
> Life Insurance in Business - Part 2: Partnerships and Corporations
> Life Insurance in Business - Part 3: Corporate Life Insurance Strategies
> Limited Policies
> Life Insurance is Your Property
> Major Medical Insurance
> Medical Savings Accounts
> Medicare
> Medicaid
> Medicare Advantage Coverage
> No Health Insurance?
> Optional Disability Insurance Benefits and Riders
> Other Types of Annuities
> Paying for Dental Care
> Pass on these Insurance Offerings
> Payment of Claims
> Prepaid Dental Plans
> Rental-Car Insurance
> Rating the Risks
> Some Insurance Riders
> Some Whole Life Policies
> Sufficient Insurance for your Needs
> Specialized Life Insurance Policies
> Some LTC Specifics
> Some Common LTC Policy Provisions
> Settlement Options for Annuities
> Save on Your Homeowners Insurance
> Types of Life Insurance
> Term Life Insurance
> The 10 Best Ways to Lower Your Car Insurance Bill
> The Basics of Underwriting Insurance
> Things to Remember When Buying Healthcare
> Ten Questions for Your Managed Care Plan
> Types of Term Policies
> Types of Insurance Providers
> Taking more Responsibility for your own Health Care
> Underwriting Group Policies
> VA Health Benefits
> Variable Annuities
> Workers Compensation
> Your Health Insurance - What You’re Paying
> Your Health Insurance - and what it should Cover

Sufficient Insurance for your Needs

When buying insurance intelligently there is one extremely important rule that you should follow; it cuts to the core of what insurance's true purpose is: Never insure a loss that you can afford to take. What does this mean? Simply put, it means that the role of insurance is to keep you from going under financially should the insured event come to pass. It also means that insurance is not inexpensive. Insurance companies know a great deal about probabilities and they price their policies to cover their risks and overhead costs while allowing for a healthy profit margin. In other words, buying insurance is like betting against the house in Las Vegas. The odds are against you or any one person actually collecting a payout. And the house keeps raking money in from everyone.

You should therefore only buy insurance when you can't afford to absorb the loss associated with the insured event. Let's look at a blatantly simple example. Suppose you bought a $15 portable radio, and at the checkout counter the salesperson talked you into purchasing an optional three-year warranty for $24.95. How much sense does this actually make? If the radio stopped working, would you really go through all the trouble of sending it back to the manufacturer for repair? If the manufacturer is willing to sell you an additional warranty, it should indicate that the company knows it probably won't be needed; and if it is, they've already gotten you to fork over more than the price for a brand-new replacement anyway. The bottom line is that you didn't need this warranty because it wouldn't break your bank if that $15 radio went belly-up.

Now, if you were a multimillionaire and owned five or six homes you might consider going without homeowners' insurance since you'd probably still be able to get by if one of your homes were lost. Conversely, if you only own one home, it's vitally important that you have adequate insurance should anything happen. Fire, theft, earthquake, flood and other occurrences should all be covered in order to protect your home and your investment. Additionally, your homeowner's policy should also protect against any personal-liability event that might occur on your property, such as someone slipping and falling on the front steps.

But in order to protect your home in the current lagging housing market, it's wise to insure more than just your house. It's widely known and accepted that traumatic events are what drive families into home foreclosure. Unexpected medical expenses, particularly long-term disabilities, are just the types of occurrences that could threaten a home mortgage.

Tens of millions of Americans today have no medical insurance. Originally a problem of the poor, this dilemma is now affecting the middle class as well. Many middle-class individuals are between jobs and have let their insurance lapse. Numerous others have opted for self-employment but haven't adequately planned for their medical insurance needs. Even those who carry medical insurance may not be sufficiently covered. With hospital and all other healthcare costs already being alarmingly high and growing perpetually more expensive by the minute, it's imperative that everyone reviews his or her policy to ensure that coverage is sufficient for their needs. Homeowners without adequate medical insurance could eventually be staring mortgage-payment problems squarely in the face.

It should also be noted that many mortgages depend on two people's incomes to properly service the debt. It would therefore only be reasonable for both earners to have adequate life insurance. If affordable, it would be a great advantage if the benefit payment of either were sufficient to pay off the mortgage. Then, if the unthinkable did actually happen, there would simply be one less major item to be concerned with.