How to Only Get the Insurance You Need

Insurance coverage is something that we all have to deal with in our lives. You have to buy homeowner's coverage, auto coverage, medical coverage and other policies. With so much money going out to insure our lifestyles, it is important that we only buy the coverage that we need. If you are paying too much for your insurance, you are basically throwing money out the window. Here are a few tips to keep in mind when buying insurance to make sure you get it right. 

Assess Your Needs

The first step in getting only the insurance you need is to assess your situation. Step back and take a good look at your finances, your health, your debt and your dependents. All of these things factor in to your decisions on which coverage you need, and which to skip. For example, if you have $200,000 worth of debt and a family, you should probably buy a life insurance policy that at least has a death benefit of $250,000. If you can afford it, a bigger policy would be even better. However, you want to make sure that at least the debt is paid off and any final expenses are taken care of. Then if there is a little bit left over for them to live on, it's even better. Take a long hard look at your situation and determine which areas are over-insured and which ones are under-insured.

Cut Out Unnecessary Items

Once you have a good feel for what you need, cut out everything that you don't out of your policy. If you don't really think you need the $3,000,000 whole life insurance policy, then cut it out. Get a cheaper term policy that will cover your needs instead. If you don't think that you need to pay for the extra co-pay benefits on doctor visits, cut that out. If you never visit the doctor, then this is probably an unneeded expense going out every month. If you can do without it, then get rid of it. The idea behind insurance is to limit your risk of paying bills that you can't afford to pay. 

Consider Raising Your Deductible

Raising your deductible is a step that many people take to eliminate costly premiums. Your deductible is the single biggest thing you can change to alter your premiums. The higher you raise it, the lower your premiums will become. Having a low deductible is not really a necessity; it is more of a luxury. While you don't want to raise it to an unbelievably high level, you want to raise it high enough that it makes a difference in your premium.

You want your insurance around when you have an astronomically high bill like when your house burns to the ground. You don't necessarily need them to pay for every little thing that happens along the way. It will probably be cheaper for you to take care of small incidents on your own.

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