Insurance may seem like an unnecessary hassle, but it’s a bad idea to drop your insurance coverage, even if things are tight from a financial standpoint. Insurance acts like a layer of protection if things go wrong, depending on the type of insurance coverage and what limitations, exclusions, and policy choices apply in your situation. In most cases, cheaper coverage covers less and excesses/deductibles are higher, but some people can only afford the bare minimum at first. As things get better and the budget gets less tight, consider improving the coverage for the following three areas, often considered the most important for the average Joe and his family:

Life Insurance

Have you stopped to consider what would happen to your family if you or your spouse were removed due to death? Regardless of age, none of us are promised tomorrow, and a death can devastate a family both emotionally and financially. It’s important to carry a policy that would cover about ten times your normal income (for instance, $500,000 policy if you make $50,000 per year) so that your family can pay for expenses related to burial, final medical care, funeral, and any other last expenses. It should also cover the cost of living for the rest of the family until other arrangements can be made, such as the surviving spouse having time to find another source of income.  Read more about Life Insurance HERE.

Trauma Insurance

If one or both spouses were traumatically injured or have a medical trauma such as cancer, the result may seem as serious as if that person(s) passed away. This is especially true if the injuries require long-term care, rehabilitation, and/or extensive surgeries to repair. In some cases, injuries are so severe that the person never recovers fully, and this type of situation is where trauma insurance comes into play. Although the coverage amount is different for each family, consider a policy that would pay off the mortgage, as much other debt as possible, and provide a source of income until other arrangements can be made. This can seem like a real challenge, but the alternative is to be left unprepared if and/or when trauma happens.  Discover more HERE.

Total & Permanent Disablement Insurance

This type of insurance is similar to Life Insurance however it pays out if the insured is totally & permanently disabled and can never work again – in other words an economic death!  It is designed to pay a lump sum on claim and ideally will provide for debt clearance, medical costs and any home adjustments that are needed.  Find out more HERE.

Income Insurance

This type of insurance is important when illness keeps the primary breadwinner from earning, such as an accident, sickness or injury. After an exclusion (or waiting) period that varies based on the policy, the insurance covers up to 90% of the covered person’s income for up to several years, or until age 65, whichever comes first, and again based on the policy. Be very careful to talk about the details of the policy when choosing an insurance provider, as this can have a powerful impact upon the length, amount, and ease of receiving the payout.  More to discover about income protection insurance HERE.

Summary

Insurance is very important to every family, simply because we can’t predict what’s going to happen after our next breath, let alone what will happen next month, next week, or especially next year. It is a wise person who prepares for the unexpected, although ultimately our trust is placed in the Lord to keep us safe. When we do go through trials though, He’s given us insurance as a resource to make these times easier to weather for our families, which gives us peace of mind even during the darkest of times.

Resources

Check out the Worksheets HERE to help you calculate how much cover your family needs.  Get the full 42 Page Workbook, DVD and 30 Day Spending Diary HERE.

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