You should find out how to read and compare an insurance quote if you own a property, vehicle or other expensive asset, or if you are interested in getting life or disability insurance.
Insurance cover is an essential part of life in today’s fast paced society where most of us cannot afford to replace expensive goods should they become damaged, lost or stolen.
Any expensive asset you own should be insured to protect you against the money that you would lose should that item be taken from you or be damaged beyond use. If you have spent a lot of money on one particular item, you will not be happy if that item is suddenly stolen or damaged in a fire.
Because certain items, like houses and vehicles, are so expensive, most people take out loans to pay for them.
If your vehicle was stolen or if you were in a serious accident and wrote it off, or if your house burnt down, you would still be liable for the loan repayments and interest but you would no longer have a vehicle to get around in or a home to live in.
This would no doubt affect your ability to work and bring in an income and you may not be able to afford to pay your basic living expenses. If you were insured and something were to befall an asset of yours, the insurance company would pay you out anything from a portion to the full amount of the value of the item.
In terms of life insurance and disability insurance, it is very important that you are covered by the best possible scheme.
If you are the breadwinner, or even if you bring in 30% of your household’s income, it is incredibly important that you are covered for death, disability or major illness.
Let’s say that you are responsible for 50% of your household’s income and that you have two children of school-going age. If you were to find out tomorrow that you had a critical illness or if you were to become disabled in an accident or if you were to die, your family would lose your income.
If you had a critical illness or if you were disabled in an accident and could no longer work because of it, your family would lose half of their income meaning that you would be unable to afford essential living expenses AND you would still have to find the money to pay for your medical treatment.
If you were to die, your family would lose half of its income and be unable to afford much of the essential living costs. It is likely that your family’s lifestyle would be significantly downgraded.
On top of that, your spouse would have to keep working to support the family and would be unable to take the time off of work to grieve. Your family would also have to cover the funeral which can be incredibly expensive, even if you only go for the basics.
How to read and compare insurance quotes
Finding and comparing insurance quotes is not difficult. You have two options:
- Find several insurance companies and approach them individually asking for a quote. Compare the quotes that you have found.
- Use an insurance aggregator that finds and compares quotes for you.
The second option is obviously the far better option because it is less time consuming and much easier.
Once you have your insurance quotes, it is important that you know how to read them. To read insurance quotes properly look at the following:
- What type of insurance package is it
- What is the extent of the cover it would be offering
- How much are the monthly premiums?
- Would the monthly premiums go up at all and if so, by how much and when?
- The other terms and conditions attached to the quote
Once you have established what the above points are, you will be able to choose the best option for you.