Thursday, September 13, 2018

The Importance of Insurance



  • 1A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
    ‘many new borrowers take out insurance against unemployment or sickness’
As with the removal of the Affordable Care Act requirement-  Americans in many areas are no longer required to have flood insurance.  With the removal of the ACA mandate individual have the option of purchasing health insurance. Because the newer risk pool is smaller due to it being optional the premiums vary as do the coverage available for new policies.  Since the changes in the ACA , Insurance Providers may limit the product coverage one can purchase based on a history of preexisting conditions.   Therefore in the future,  if you have a preexisting condition you may find that you are unable to get an insurance policy, may have that condition excluded from coverage or may pay an extremely high premium.   

From my own experience in purchasing a new life insurance policy the proposed rates are somewhat higher than in the past, due to a blip on a medical record that has since been updated but had been reflected in my history. I am in process of contesting this but it is just one example of the increased vigilance on the insurance company end of pricing my policy.  (I am in good health).  For someone with a preexisting condition and with limited available options the costs can be very high if one does not have continuous coverage.  Some new policies can refuse coverage if you have a lapse in your health care insurance.  Keep this in mind, particularly millennials who think they are saving a few dollars.   

Likewise many American's are no longer required to have flood insurance.  Although the short term savings and that paying premiums may be a waste if there is a flood these people will have no protection and can be literally wiped out financially.  Since 2013 there has been a decline in the number of households choosing to have flood insurance.  In general we have been experiencing an increase in the number of major storms over the past few years and it looks like this will extend way in to the future.  

At the time one may feel like they are saving money by not purchasing insurance but in the long run, insurance may be the only way to help mitigate the risk associated with your financial needs.  This goes for Property & Casualty Insurance as well as Long Term Care options.  (as a reminder Flood insurance is separate from Home Owners Insurance and flood damage may not be coverage under a standard HO policy)

The unexpected happen in a second.  At that point if you don't have protection the loss is 100% yours to handle.  I do not claim to be an expert in the actuarial or insurance field but have always believed in protecting my risks.  One needs to look long term when making these decisions.  While you are healthy and don't need the insurance is the time to invest in it.  This is when the premiums are lowest for health, life and flood insurance.  

Wendy is a Realtor with Coldwell Banker Needham.  She is always looking out for the best interests of her clients and loves sharing her ideas to help improve the daily life of those she cares about.  For more information check out her website or like her on FB by clicking here.  

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