There are many different types of
insurance
which are available to cover your risks. When you are into the process of income
planning, you must make sure you are well covered from all the risks.
Consulting an insurance agent who doesn’t charge you for his time is a decent
idea to come across all the different policies which are available in the
market. However, each agent will only have a narrow range of products which
don’t prove to be comprehensive enough. Talking to multiple agents can leave
you confused as well. You can also consult an experienced financial adviser
like Jeff Viveros who knows
not only about insurance policies or pension plans but about financial instruments
and markets in general.
Apart from the commonly purchased
life and health insurance that take care of medical emergencies, treatment
costs, accidental loss of life, etc., there are other policies covering
different aspects of your finance. There is property insurance to cover damage
to vehicles or your assets. There is travel insurance to cover personal risk
and luggage risk while travelling. You can also go for liability insurance if
you have a business and are at risk of having to pay for too many claims.
A consultant will also take you
through other policies that offer some financial stability and security to the
policy owner. For example, there are whole-life policies which are permanent
and cover investments as well as life risk. The policy offers an assured amount
to the dependents if the policy owner dies. However, the policy also comes with
a cash value because the policy provider utilizes part of the premium to invest
in the markets, whether that is securities
or bonds or some other financial instrument.
There are tax benefits on the
cash value of some policies. Another advantage offered by these policies is the
fact that one can borrow money or take loans with the cash fund of the policy
as collateral. The returns depend on the market returns and there is nothing
assured about it. There are also other policies such as variable life and
variable universal life. The returns although not guaranteed in terms of
amount, are steady and connected to the performance of stock.
If you want to go for a cheaper
policy, you can ask the consultant for advice with term insurance where the
premium is low. There is an assured amount that one can claim in case of
occurrence of the event against which the policy was purchased. If the term
expires, the individual does not stand to receive anything from the policy
provider. There are some policies which can be renewed by the policy provider
year after year. It should be noted that for most policies the premiums
increase as one gets older considering the risks that are associated with
senility. Although, insurance policies are not a pure out and out investment
product, you can purchase them to cover risks against your investments,
properties or earning capability. You can buy coverage for a specific term or
for life.
