The first thing that comes into a lot of people's minds when they hear the word "insurance" is something along the lines of, "How can I pay more money to hope nothing bad happens?"
Or maybe they think about their rent or mortgage and wonder how on earth they'll have enough for food if they have an emergency. In reality, all of us should have some sort of insurance — it's just a matter of what kind.
Insurance doesn't save you from everything, but it does save your wallet from some very expensive situations. In the U.S. and Canada, we have different types of insurance that cover single people as well as families with children. We all probably know that health insurance is required by law in most states and that home insurance covers your house and the belongings inside of it from certain things. But there are other types of insurance out there as well. Let's take a look at some of them.
Home insurance covers the possessions inside your home from certain disasters, such as a fire or theft. However, it usually doesn't cover regular wear and tears on things like carpets and furniture. In most cases, you're required to have homeowner's insurance if you have a mortgage on your house because the bank will require you to carry it so they won't be stuck with a bill in case of disaster. It can often come bundled with renter's insurance, which is similar but not exactly the same thing for people who don't own their homes yet. There are online sites where you can compare the rates of Canada's top insurance providers and choose the best type of insurance for your needs. The benefit of home insurance is that it covers the cost of certain disasters to your home and belongings, which can otherwise be staggering.
Health insurance is a must in most states but it can get really expensive depending on what type of plan you choose and how much coverage you need. It covers certain medical expenses related to accidents, injuries, and illnesses. If you have health insurance, you probably already know that it doesn't cover all of your medical needs. Many plans have a yearly maximum amount they'll pay out per person or family before they start charging extra, so it's important to read the fine print in this area when choosing a plan. Health insurance is required by law in most areas but many people choose to buy it even when they're healthy because it adds an extra level of financial security.
Unlike health insurance which only covers medical emergencies, life insurance is meant to cover your funeral expenses and the living expenses of your dependents if something ever does happen to you. Of all the types of insurance, this is one that will probably require a lot more research since there are so many companies offering so many different plans with different features. It's important to compare rates between several companies before making any final decisions about which type of policy you want. When your income stops coming in due to death, purchasing life insurance would help replace that income for the people who rely on that money to pay bills and buy food. Make sure to check with your employer before purchasing a policy since they may already carry insurance on you in case of death or disability.
This type of insurance is for people who want to leave something behind for loved ones in case they die while still owing money on mortgages or loans or if there are other financial obligations tied to their death. The benefit can be in the form of cash payment, monthly income, or both but the payout only comes after someone dies. This type of insurance can often be a lot more expensive if you're a woman because women typically live longer than men and this means the insurance company will have to pay out for a longer amount of time.
This is also required by law as long as you drive your own car or truck on public roads. It covers the cost of damages from accidents, which can be pretty high these days thanks to soaring medical costs. In many cases, it's bundled with homeowners insurance so you only have to purchase one type of insurance instead of two. What about pet insurance? Does that fall into any of these categories? Some people believe that pet insurance should be similar to health insurance but it isn't always the case — even though certain types do cover injuries and illnesses just as human plans do. Auto Insurance only covers damage to your car or other vehicles if you're at fault. Pet insurance can protect against accidents, injuries, illnesses, and more but there are usually some exclusions in the event of certain pre-existing conditions. And make sure to ask questions before signing on with any pet insurance company because some don't cover hereditary problems or preexisting conditions.
Having basic types of insurance coverage is important for all Canadian citizens since they're legally required to carry it so they won't be stuck with a bill in case of disaster. It can often come bundled with renter's insurance, which is similar but not exactly the same thing for people who don't own their homes yet.
The good news about insurance is that you don't have to purchase each type from the same company. You can shop around for the best deals on health, life, and auto insurance separately if you don't want "bundles" that combine them all into one package deal. However, in most cases, you'll get a discount for having multiple policies with the same company because they know you're already familiar with their reputation from past dealings.