Risk Management with Insurance

Risk Management with Insurance

Another important part of financial planning is identifying and managing the
potential risks that can impact your finances. The value of insurance is that it's a
cost-effective way to mitigate or share the potentially overwhelming cost of
various risks.

♦ Health Insurance -- Most plans provide
basic coverage for common medical expenses,
such as doctor visits, preventive care,
diagnostic tests, hospital and extended care,
emergency services, and prescription drugs.
♦ Auto Insurance -- Liability insurance
provides compensation to persons who would
be able to sue you. Property damage insurance
includes collision and comprehensive coverage.
♦ Life Insurance -- Income replacement to
your survivors. It provides an income tax-free
death benefit, and can be used to pay for funeral expenses and even medical
expenses of a last illness.
♦ Property Insurance -- Covers a variety of risks that can cause
damage to your home and personal property, medical payments for injuries
to occupants and to other persons injured by accident while in your home,
and loss or theft of personal property.
♦ Liability Insurance -- A last line of defense against potentially
devastating claims for things over which you may have little or no control. It's
often called umbrella insurance because it's carried over all other liability
insurance and usually adds $1,000,000 or more in extra coverage to your
homeowners and automobile liability policies.
♦ Disability Insurance -- In the event you are out of work due to an
injury or illness, disability income insurance benefits can be used to preserve
your independence, maintain your lifestyle, give you time to recover, provide
a chance to retrain for another job if necessary, and conserve your assets
and savings for you and your family.
♦ Long-Term Care Insurance -- Private insurance that pays benefits if
you need extended care, such as nursing home care. Long-term care
insurance protects you against a specific financial risk--in this case, the
chance that the need for long-term care will wipe out your life savings.

Source : Kramer Financial

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