How Can I Insure My Future?

Long ago, we figured out there is strength in numbers. For hundreds of years, people have been joining forces against all kinds of calamities — including financial troubles.

The concept of insurance is simply that if enough people can pool their money to form a large enough fund, then together we can handle practically any financial disaster. Your motivation for contributing to this fund is your own eligibility to draw from it if the disaster happens to be yours.

One for all and all for one, so to speak.

In spite of the complications and occasional bureaucratic snarls, the system has worked remarkably well for literally ages. The Code of Hammurabi, from Babylonian laws dating back to 1700 B.C., contains a credit insurance provision. For a little more interest, the ancients could exempt themselves from repayment of loans in the event of personal misfortune.

A citizen of the Roman Empire could buy life insurance through the Collegia Tenuiorum for slaves and wage earners, or the Collegia for members of the military. The funds provided old-age pensions, disability insurance, and burial costs.

Today, virtually all heads of families should carry life insurance just like the prudent Romans. Most financial advisors also recommend the following types of policies: automobile, health, homeowners, personal liability, professional liability and/or malpractice, disability, and long-term-care insurance.

Purchasing individual or family insurance coverage is an important financial decision — probably one of the most important you will make. A great deal of study and advice are needed to choose wisely. A few basic guidelines can safely be applied to most customers. Beyond these, each individual’s needs are unique and should be carefully assessed by an expert.

1. How much insurance do you need?

Don’t insure yourself against misfortunes you can pay for yourself. Why gamble all that money that misfortunes will happen? If they don’t, you’re way ahead. If they do, it will usually cost you less in actual costs than the insurance premiums you would have paid.

2. What kind of policy is best?

Broader is better. Cover as many misfortunes as possible with a single policy. Carefully examine policies that exclude coverage in certain areas. These are called policy exclusions.

3. Whom should I buy it from?

Consider buying from financially strong companies. You may save by buying multiple policies from the same agent. Shop carefully. There is strength in unity. Join the party, but only buy what you need.

© 2006 Emerald Publications

HOME INSURANCE

The 17 Perils Actual Cash Value vs.Replacement Cost Understanding Deductibles Documentation of Valuables Expanding Coverage Floaters for the finer things Flood Insurance Insuring a Home Liability Coverage The Basics of Homeowners Insurance Cover yourself an Umbrella Liability Insuring a Condominium Special Circumstances Renters Insurance

VEHICLE INSURANCE

On the move: Auto/Vehicle Insurance Protection Auto Insurance Basics Additional and Optional Coverage Who's at fault Premiums and Discounts What to do after an accident Getting your car back Using your personal car for business Risky Drivers Adding a teen or college-bound driver Motorcycle Insurance Watch the Hull Specialty Policies Insure Fun Aviation Insurance

RISK MANAGEMENT

Term Life Insurance Whole Life Insurance Universal Life Insurance Variable Life Insurance Auto Insurance Insurance Claims Maximizing Insurance Benefits Insuring your future Protecting your home Accessing disability insurance Types of Health Care Additional Liability Coverage HMO's and PPO's Evaluating Insurance Companies Long-term Care Costs Medicare Coverage Long-term Care Needs