A financial plan should include various crucial items like estate planning, mortgages, credit cards and loans. One important item should be insurance. Insurance is what happens ‘if something bad happens’. People without it will only see the benefit of insurance when that bad thing happens.
Benefits of insurance are manifold! It gives you peace of mind that your loved ones will be taken care of when (not if) you die. Indemnity to cover your loans will prevent your loved ones from inheriting your debt. How sad would that be? Not for you, since you will have departed, but for their memory of you. A loan that they cannot cover could result in your assets being seized to repay it. Could you do that to them?
What kind of insurance will cover my debt?
Insurance that pays when you die. Determine the amount and repayment period of your outstanding expenses and get insurance to match it. Your own death is an expense that will appear somewhere in your life, normally at the end of it.
You most certainly have to create insurance to cover the mortgage on your house or the loan on your car. This way, if you were to pass away while there is still an amount owing, it will automatically be paid off. By matching the term of the loan and the term of the policy, you will only have to pay premiums for the term of the loan.
So, if your car loan has three years on the term and you matched that with a policy, should you pass away in the second year, the policy would pay your beneficiary the full amount of the loan. Only two thirds is needed to pay the outstanding balance.
Many kinds of loans, including mortgage loans, car loans, overdrafts and personal loans can be secured in this way. Even debt on hire purchases of whatever you bought.
Surely you care enough for the ones you’ll leave behind to get insurance!
Selecting the best company for car insurance sounds rather impossible, right? You can’t rely on an agent to help you, as he is either representing several companies or one company exclusively. Or can you? He has direct ties with your community after all and is easily accessible.
Many companies don’t use agents to market their products but use the internet or telephone instead. Perhaps you can ask your neighbor, but the best for him is not necessarily best for you. Your choice of company will be determined by time and past experience.
Consider these Car Insurance factors
1.Insurance Agents – For the person who wants personal contact and advice, the Insurance agent is of great value. Insurance agents have been the most successful way of distributing car insurance products.
2.Direct Distributor – These companies serve you via mail, the internet and call centers. They give instant car insurance quotes and hassle free purchases. They claim to have lower rates as the middle man is eliminated.
When you have decided how you want to be served, you can begin the search for your most suitable Car Insurance Company. Find online rating guides to help you.
Statistics reveal risk and insurance premiums to be charged
How well you know your Insurance agent has no effect on the terms of the policy you purchase from him as it used to be in days gone by.
In the days before computers, auto insurance was personal and a policy was individual. Your agent could call in some favors from his colleague in head office to obtain better insurance premiums for you. It was a given that male drivers under 25 paid high premiums and young females were considered as lower risk and charged less.
Nowadays, insurance companies have large databases containing accident and claims records. By calculations, these records will reveal the type of person likely to be a safe driver and the one likely to be an accident risk.
Generally called ‘Black Box’ technology, it provides the understanding of the background and conduct of people, they think should pay higher insurance premiums. For example, people with less responsibility are actually of higher risk than those with higher liability.Statistics have shown that the bearers of bad credit scores are more likely to be involved in accidents.
How are auto insurance premiums determined?
It is a toss of the dice between staying competitive by comparison and making the best profit for shareholders. Now that they have ‘Black Box’ technology, auto insurance companies are scrutinizing every driver. Credit score, career, past record, even the city you live in have an influence on your rates.
Selecting low limits of liability has proven you to be higher risk than those who select higher limits. That means you could lower your auto insurance premiums if you raise your liability limits.
In some cases the new ‘Black Box’ technology reduced rates by up to 20% compared to companies that aren’t using it. Unfortunately, credit scores play a part in ALL auto insurance rating. A bad credit score results in higher insurance premiums. You won’t have the advantage of ‘discounts’ or ‘loyal customer’ credits any more. You will be rated right down to your shoe size, counted amongst drivers like you, and charged consequently.