You may have thought about buying a life insurance policy so that your loved ones are secure if something happens and you are no longer here. Even with that basic knowledge, you may still be unsure of how life insurance works and what it entails. It can be hard to contemplate your fate, but you are hardly alone. Too many people put off purchasing life insurance and leave their family to bear the burden of debts, funeral costs, and other expenses. Let’s take a closer look at why you need life insurance and how it works.
Simply put, life insurance is a contract between the insurance company and you, the policyholder. The contract will guarantee that if anything happens to you that your loved ones, the beneficiaries, will receive payment of a benefit at the time of your death. The life insurance policy will give you the peace of mind to know that your loved ones can continue to live the same lifestyle they had been in the same place. Life insurance can even let you leave money to a charity that is important to you.
All life insurance policies have the same goal, to make sure that beneficiaries receive payment when you pass away. There are, however, various types of life insurance available.
Short-term protection – Term life insurance falls under this heading. A policy can be purchased for a definite amount of time, usually ten to thirty years. If your demise happens in that period, your beneficiary will receive payment of a death benefit. If you outlive the covered period, then the policy ends.
Long-term protection – This is also known as permanent life insurance, which also includes whole life insurance and universal life insurance. Long term protection covers you for the rest of your life. Just like term coverage, long term protection yields a death benefit to your beneficiary at the time of your death. It also offers benefits before your death, such as having a cash value that can be accessed in times of need such as a child’s wedding or college tuition. Some retirees have used long term protection policies as a way to supplement their income.
One type of policy may be enough to cover your needs, or you may want a combination of different coverages. What you choose depends on your particular situation. Discussing your needs with an agent can help you to decide what coverage or coverages are best for you and your loved ones. As time passes your needs may change, periodic reviews of your policies to gauge if adjustments are needed to your policy will ensure your loved one’s needs are met.
Everyone’s needs are different, and there is no one size fits all policy. Sometimes the group coverage you receive through your employer is just not enough. Most life insurance policies obtained through group coverage are not portable, so when you leave the company, most likely you leave the life insurance. You need to examine what will play a role in determining how much life insurance you need. Factors like the size of your family, the value of your home, how much debt you’ve incurred, and your business (if you own one). If you have children, you will want to ensure coverage of basic expenses such as food and clothing, to future costs like college tuition.
The key factor is what you want for your family. How much help do you want to leave for your family when you can no longer be with them? Do you want to keep them headed towards their life goals? Do you want to make sure your spouse can stay in the home you made together? These are just a few things you may want to take into consideration.
Your age and health will determine how much life insurance costs. Younger and healthier people typically pay lower premiums. The cost of not having life insurance, however, cannot be put into a dollar value. The burden left on your loved ones if you did not invest in life insurance will be costly for them.
Getting life insurance is an easy way to have peace of mind knowing that if something happens to you that your family will be able to carry on.Continue Reading
As a renter, the apartment or townhouse you live in may not require you to have renter’s insurance, but not having it puts your possessions at unnecessary risk. As a landlord, you can protect your tenants and your bottom line by making it part of a lease agreement. Here’s why if you’re are a renter or landlord you should consider renter’s insurance.
Renters insurance is a type of insurance that covers your personal property in a rental residence. It repays tenants for lost, stolen, or destroyed belongings. Renter’s insurance also covers vandalism, fire, and natural disasters. Most policies don’t cover flooding or something like water damage from a burst pipe. In the second scenario, the rental property would be responsible for paying for the damage. Renters Insurance is different from a Renter Dwelling Policy which covers the physical structure; renters insurance covers the tenant’s belongings (and liability) inside.
It’s not hard for tenants to purchase renters insurance, and it usually costs about $12 a month for most rental units depending on the scope of what the policy covers.
Renter’s insurance is the only way tenants are guaranteed they’ll be compensated for possessions that are lost, stolen, or damaged
If you have a guest to your rental residence, and they are injured on the property. Even if it’s not your fault that the guest was injured, you could be held responsible. Renters insurance will shield you from being liable for the injury and the subsequent medical cost related to it.
Another reason to have renter’s insurance is that it will cover your personal property even if it may be located in the rental property. The policy could include things such as having something stolen from your car or losing a suitcase on vacation. Depending on coverage, some renter’s insurance policies will cover damage to other’s property such as bumping into a crystal vase and breaking it, or your child knocking over a display of glassware at a department store.
By requiring your tenants to carry renters insurance, you protect yourself or your company from being liable. If someone gets injured in your tenant’s rental residence, you could be sued for medical costs, even if you are not responsible. Renters insurance would pay for someone’s injury in a rental residence and would reduce the chance of a lawsuit from the injured party.
Requiring renter’s insurance means that you can allow tenants to have pets, most renter’s insurance policies cover damage from pets up to a certain size. Obviously, it would not cover someone having a pet like a donkey in their apartment.
Requiring your tenants to have renter’s insurance would also cover relocation costs in the event of a fire or natural disaster. This benefit would keep your company from having to cover the costs of a hotel. It may be that you or your company just want the best for the tenants and want them to be covered even if it’s not your responsibility.
Regardless of if you are a tenant or a landlord owning renters’ insurance can give you peace of mind that your possessions or your rental property are covered. On both sides of the renter’s insurance policy, the cost of lawsuits can be reduced or covered altogether. It’s clear, when it comes to rental properties having renter’s insurance is the smart choice.Continue Reading
Most everyone has some type of insurance policy containing the terms below. Familiarize yourself with each section.
The common sections of most policies include the following:
Declarations – The Declarations Page is basically the first page(s) of the policy package. It “declares” who the insured is and what time period the policy covers. It also provides general information including address, description of what’s insured, coverages and limits.
Definitions – This section defines certain keywords in an insurance contract. It’s important to read these definitions, because your personal definition of a certain word may be different from the policy’s definition. If you still come across wording you don’t understand, log on to the Insurance Information Institutes site at www2.iii.org/glossary.
Coverage – The coverage area describes the specific insurance provided by listing what property is covered and for what perils. Many insurance contracts provide comprehensive coverage, meaning everything is covered unless it’s specifically listed as excluded. Be sure to read this section carefully so you know whether your policy is listing a peril as covered or not covered.
Exclusions – The exclusion portion describes what coverage limits exist or how coverage may not apply depending on how the loss occurs.
Limits and special limits – This section explains how much the insurer pays for particular losses or types of property. So, while something is covered, it may only be covered for a specific dollar amount or for a limited percentage of the entire loss.
Conditions – This area basically lists the ground rules of your policy. It tells you what the insurer’s responsibilities are, and what your responsibilities are as the customer. This includes information on how to cancel your policy and subrogation.
Endorsements – Endorsements are optional coverages you can add to a standard policy.
Lock Insurance offers policies to provide the coverages you want. Not everybody insures vacant, landlord and rental property, but Lock Insurance does. Lock Insurance provides specialized coverage with a program that can be easily customized.
Still not sure what your policy provides? Call me to discuss your coverage and find out how to get a flexible package from Lock Insurance.
Product availability is based on authority and all products may not be available in all areas.
This does not constitute legal advice. For a complete list of the specific landlord and tenant laws in your state visit www.landlordassociation.org/statelaws.html, or for legal advice, speak with a real estate attorney.
Don Westerfeld 2/12/2013 11:36:00 PMContinue Reading