If you do anything in life, there is risk involved. If you turn on a light, you run the risk of getting electrocuted. If you drive to the store to buy a frozen burrito, you run the risk of getting run over by an out of control cement truck. In order to protect against this risk, from a financial perspective, people invented insurance. That way, if there is an unlikely accident that you have to pay for, you won't end up in the poor house. The insurance will cover it.
Many people think of this as some kind of social evil that they only buy if they absolutely have to. Other people think that insurance is the greatest thing since sliced bread. Wherever you are on this topic, this article will help. You'll learn some basic ideas about insurance, so you can make an informed choice when it's time.
Many people wonder about life insurance, and when you should get it. This all depends on your family situation. Generally speaking, life insurance is designed to replace your income should you die suddenly. If you are the main provider for your family, then you should definitely get some. The younger you are, the cheaper it is.
Even if you don't have any financial obligations, getting a little bit of life insurance can help pay for your funeral if you happen to eat a poison frozen burrito or something.
If you drive a car, you need car insurance. In many states, you can lose your license if you are caught driving without car insurance. Regardless of how old your car is, or how little you drive, you need to get some.
Unless you are covered under your parents health insurance plan, then you need health insurance. Chances are if you are employed, your employer takes car of getting your insurance, and the premiums are taken out of your paycheck. This is generally much cheaper than if you had to buy it on your own.
When you get a mortgage to buy a house, it will likely have a minimum amount of homeowners insurance. This is generally limited to fire. So if your house burns down a few days after you move into it, at least the mortgage will be paid off. But all your stuff won't. That's why it's a good idea to extend it to cover all your stuff, and to cover any accidents that may happen in your home to your visitors.
So there you have it, the basic kinds of insurance. Now that you know a little more, it's time to go out there and buy some. Happy shopping.
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