If you’re anything like me, 2020 definitely got you thinking – there’s only so much we can control. I remember how serene I was last New Year’s Eve. So optimistic about this new, exhilarating decade that was about to begin at midnight. I had my eyes set on travelling, on growing my business, and on the great opportunities ahead. While I did hear something about people getting sick with the flu in China, I didn’t give it much more than a passing thought. Maybe a frown. Little did I know that this seemingly far-away development would impact our lives so deeply, and in so many ways.
2020 taught us that we need to make room for what’s unplanned. It taught us that we need to invest in safety nets and in better care structures for the future. Luckily, as an independent insurance agent, I specialize in foresight, and I’d like to share with you my take on the 10 types of insurance you should consider in 2021.
Note that I am not advising you to invest in ALL of them – far from it. I am merely suggesting that you take the time and review your individual situation, and then make an informed decision about what types of insurance would be best for you and your family.
So, without further ado, let’s jump right to it.
Last year shone bright on our health scares and anxiety, so it’s only natural that we begin our overview with a policy designed to provide financial relief in the event of sickness.
Health insurance pays for medical and surgical expenses that result from sickness or injury. The costs are either reimbursed to the policyholder or paid directly to the healthcare provider. If you’re employed, there’s a high chance that your insurance premiums are subsidized by your employer, as most companies pride themselves on their health insurance benefits. Or, you may be able to subsidize health insurance through the Affordable Care Act (Obamacare).
Health insurance plans include health maintenance organizations (HMOs), preferred provider organizations (PPOs), exclusive provider organizations (EPOs), point-of-service (POS) plans, and high-deductible health plans (HDHPs). You can read more about them here, or contact me directly for more information.
If you have people who depend on your income for their livelihood, it’s essential that you invest in a first-rate life insurance policy. While nobody likes to think about worst case scenarios – much less actively prepare for them – life insurance will allow your loved ones to continue living comfortable lives in the event of your death. Your beneficiaries will be awarded a death benefit that can cover anything from funeral bills, to living expenses, to college funds and tuition. Naturally, the amount of the payout will depend on your premiums and on the type of policy you own.
Life insurance options include:
- Term life insurance, which is usually preferred by most average-income families, as the premiums are very affordable and it offers adequate protection. Term insurance policies are designed to cover a family’s most vulnerable years (usually the first 10, 20, or 30, until children grow up and are settled). In order for the death benefit to be awarded, the event needs to occur in this time frame.
- Whole life insurance, which is significantly pricier than term and isn’t necessarily a good option for most people – unless you know you will always need life insurance coverage (e.g. you have a disabled child or spouse), you’re better off with a term policy. This type of protection guarantees a payout, and some even accumulate cash value over time, which you can subsequently borrow against.
- No-exam life insurance, which is an option for those with underlying health conditions that might otherwise make them ineligible for protection.
Williams Insurance Group offers a broad selection of life insurance options, so make sure to get in touch if this is something you are looking to invest in.
3. Disability Insurance
Along the lines of health and life policies, it’s important to consider that, according to the Social Security Administration, roughly one out of four young adults will be disabled by the time they turn 67. Disability insurance is a policy designed to replace your income should you be unlucky enough as to be the one hit by this misfortune.
You need to think about your circumstances when reviewing insurance options. For example, it would make more sense for a construction worker to invest in disability insurance than it would for an office clerk. I recommend you get in touch with an independent insurance broker to discuss your situation – they will be able to guide you and advise on a personalized insurance plan.
4. Long-Term Care Insurance
Long-term care policies are designed to ensure that seniors can live their twilight years in comfort, and that those with chronic illness or disability can benefit from in-home help with basic tasks, such as grooming or eating. It’s important to know that this type of assistance is usually very expensive without insurance and is not normally covered by Medicare.
As with disability insurance, make sure to thoroughly analyze your personal circumstances when deciding whether to buy or not. Consider aspects such as family proximity, medical history, and ease of access to essential facilities, and contact your insurance agent for more information.
5. Dental Insurance
Skipping annual cleanings is all fun and games until you get your first real toothache. While some of us might be tempted to neglect dental care in young adulthood, there comes a time when we need to pay the price for our laissez-faire attitude – and I mean that literally.
Dental work is quite expensive, and it is not usually covered by healthcare plans. Depending on your insurance needs, it’s advisable that you browse the market for a policy that ticks most – if not all – of your boxes.
There are multiple types of insurance to choose from. For example, preferred provider organizations (PPOs) allow you to choose from a network of service providers that offer a range of dental services at a reduced price, while health maintenance organizations plans (HMOs) are affordable options with no deductibles and mostly free preventive procedure packages. You can read more about types of dental insurance here, or, as always, get in touch with an independent insurance agent for more information.
This is one of the types of insurance I believe all vehicle owners should take the time to research and understand. While state minimum liability coverage offers some degree of protection against the financial damages caused by accidents, it’s clearly not enough, as it still leaves YOUR vehicle completely unprotected. This makes room for a lot of ambiguity, and ambiguity is exactly what we’re trying to avoid.
In supplementing your auto coverage, you can opt for:
- Collision, that pays for the damages incurred by your vehicle, should you be involved in an accident.
- Comprehensive, that adds protection for things like vandalism, fire, or theft against your vehicle.
- Uninsured or Underinsured Motorists, in case you collide with a vehicle whose owner either doesn’t have insurance or doesn’t have “enough” coverage.
For more information about your auto insurance options, feel free to drop me a line directly – Williams Insurance Group specializes in such policies and I’d love to help you out with a quote.
Homeowners insurance covers damages done to your residence and offers liability for some accidents – for example, think of someone slipping on your stairs and hurting his or her back. While most common occurrences – such as theft or fire – are covered by home insurance, make sure to supplement your policy if you live in areas prone to flooding, earthquakes, or other natural disasters, as such events don’t usually fall within the scope of homeowners insurance policies.
You can choose between actual cash value (ACV) and replacement cost policies. While the former correlates reimbursement by accounting for depreciation of the damaged or stolen object, the latter accommodates its replacement at full value in today’s market. Take, for example, a television set – if your 10 year old TV becomes inoperable due to water damage, an ACV policy would reimburse you for its present-day value minus depreciation (which is very small), while a replacement cost policy will simply pay for a new TV.
There’s more to be said about homeowners policies, so make sure to contact your independent insurance broker if this is something you plan to purchase or upgrade in 2021.
8. Umbrella Insurance
Umbrella insurance offers an extra layer of protection on top of your homeowners and/or auto policy. Simply put, umbrella insurance kicks in once your main liability coverage is exhausted and covers the leftover damages. In extreme cases, it can even protect against bankruptcy (think of being sued for damages or injuries resulting from a horrific auto accident).
Give this policy some thought if you have an above-average net worth, and contact me for more information.
Small business insurance can help your company stay on track in case anything undesirable happens to its assets or key executives. You can consider the following:
- Liability coverage insures against lawsuits. Depending on the circumstances of your company and on how much damage a lawsuit could cause, you can choose from general, professional, product, or employment practices liability coverage.
- Property insurance, highly similar to homeowners policies, but also protecting inventory and equipment.
- Auto insurance, for the vehicles that are essential to your business.
- Key person insurance for your top execs, with the business listed as the beneficiary.
For more information about small business insurance, contact your independent insurance agent.
10. Travel Insurance
Lastly, we’re all dreaming of long trips and sightseeing in 2021, but current events don’t seem to accommodate too much predictability. Travel insurance comes in very handy for situations like these, as it can reimburse you in case of trip cancellation (even if the tickets are non-refundable), offer additional medical coverage in the country of destination, and aid fast relocation in case of emergency (leave now, get your things later).
All in all, travel insurance is an imperative add-on for your 2021 trips, so make sure to drop me a line if you plan on traveling next year.
What other types of insurance would you add to the list?
While I believe these would be the most important types of insurance to consider in 2021, this list is by no means exhaustive. So, let me know what else you’d add to your insurance package, and I’ll make sure to give it some thought and discuss it in one of our next blog posts.
Until then, make sure to reach out if there’s any other insurance information or need that Williams Insurance Group can help you with.