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Are You Going Bare?

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No, this article isn’t about nudism. “Going Bare” is a term used to refer to individuals or companies who are uninsured.

About a year or so ago, a major consumer protection magazine reviewed books about personal finance written by the well-known gurus on the subject. The magazine found that the subject of insurance was hardly covered at all.

If you think about it, this is a strange omission on the authors’ parts. Without insurance the best laid financial plans can disappear in a moment of inattention or a puff of smoke. All you saved and invested can be gone in seconds.

Insurance is here to make sure an accident does not destroy you financially. It protects against you against risks such as fire, flood, theft or auto collision.

It will defend you if you injure someone in an accident either in your home or with your car.

It will allow your surviving family to carry on for a time without the income you produce and it will even replace that income if you become disabled.

Many people don’t believe that a disaster will befall them. Or they want to spend the money on something that’s more fun.

But as expensive as insurance may seem, and certain policies, like disability insurance can be quite costly, it is substantially cheaper than the alternative.

If you home burns down and you lose it and its contents, the premium you pay now will seem like peanuts.

If you run someone over with your car and cause them serious injuries, the cost of your legal defense alone is many times what you pay for the policy.

Insurance is the difference between picking yourself up and carrying on after a disaster or facing bankruptcy and financial ruin.

The following is a list of insurance every family with a wage earner, a home and a car should carry. Make sure to check the AM Best ratings for any company you consider to ensure that it is financially sound.

(If you want to know how well an insurance company treats its customers, you can find out at on the website of the National Association of Insurance Commissioners – http://www.naic.org/cis/index.do )

In my opinion every wage earner should have term life and a disability income replacement policy.

If you own a home or rent, you need homeowners or renters insurance. If you live in a flood or earthquake zone, you need extra coverage for those risks.

If you have a car, auto insurance is mandatory in most states – but don’t think the legal minimums required by most states will protect you in a serious accident.

Finally you need good health insurance coverage, preferably backed up by a high limit major medical policy.

Death is inevitable. Sickness, disability, fire, flood, theft and accidents are not uncommon at all.

Prepare for life’s risks so you don’t become one of its victims.

Article Source: http://ezine-articles-planet.com

Chris Cooper a retired attorney, and his wife Aileen, who has a MBA in Finance, provide personal finance and financial planning advice at www.credit-yourself.com">Credit Yourself

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