Good insurance is the key to financial security in the United States. The state partially supports people who have health problems or have lost their jobs but you should not rely on the care of the state if you suddenly need help. Self-insurance of your health, life, car and real estate is the best way to take care of yourself.
Types of Insurance Products
Health insurance
There are currently no universal state health insurance programs in the United States. People over 65 years of age and some people with disabilities who are younger can receive Medicare care. It is available to native Americans and citizens who have been legally resident in the United States for at least 5 years. The state also offers a health care program for low-income families, pregnant women, and children (Medicaid). For foreign nationals, Medicaid and Medicare conditions are the same; for Americans, Medicaid conditions may vary slightly from state to state.
Despite the existence of government programs, more than 45 million Americans have no health insurance at all. But medical services in the USA are very expensive, and one serious injury or illness can cost thousands of dollars. And this means that many middle-class families can simply go broke.
Most Americans insure their health at the expense of their employers. Full-time workers are in a better position because they receive insurance completely at the expense of the employer. Moreover, insurance usually extends not only to the employee but also to members of his or her family. The terms of such insurance are usually very favorable.
The problem arises in case of job loss. Under the existing regulation, the dismissed may retain the conditions of work insurance. However, they will have to pay it in full, including the part that the employer previously paid. This is often beyond the means of a person who has just lost his or her job.
Another typical insurance problem arises if you already have health problems. As a rule, insurance companies try to reduce their risks by eliminating existing diseases from insurance. As a result, a person will be insured against possible health problems in the future but is forced to pay for the treatment of previously identified diseases.
If you work for yourself or do not work at all, you should try to get personalized health insurance. There are many companies offering various insurance conditions. Do not be too lazy to spend time on a thorough study of the offers and arrange an appropriate insurance in a company with a reliable reputation.
Life insurance
If you suddenly die today, could your family exist without your salary? Could your kids graduate from college? Could they pay off all your debts? Could you pay for the funeral? The purpose of life insurance is to ensure that these needs are met in the event of your death.
There are two main types of life insurance. The most popular is the so-called “limited” insurance. The insurance company sets a fixed annual fee, which can be paid monthly or quarterly. The amount of contributions depends on your age, state of health, the desired insurance coverage and other factors. Insurance is paid in the event of your death during the term of the contract, which is usually from 20 to 30 years. Your beneficiaries receive the amount indicated in the contract.
The second type of life insurance is called “whole”. In this case, interest is accrued on each of your installments made monthly or annually. This is very similar to a bank savings account. In addition, the possible amount of insurance payments is gradually increasing. But this type of insurance usually costs more than “limited”.
Many Americans are convinced that life insurance is only insurance but not a way to save money. Therefore, most people buy cheaper “limited” insurance and invest money in other ways.
It is advisable to buy insurance in a reliable and financially stable company. An insurance company experiencing financial difficulties may terminate its activities at any time. If you are old or sick by this time, then renewing the insurance policy will not be easy. Usually, you will have to undergo a small medical examination before life insurance.
Many people forget about such an important type of insurance as disability insurance. But the likelihood of prolonged disability is usually higher than the likelihood of death at a young age. Disability insurance covers part of your income if you are unable to do your job due to temporary or long-term health problems. Such insurance is provided by most employers, but you can purchase its personal version. This type of insurance is especially important for people whose work depends on their physical condition.
Car insurance
Statistics show that driving a car is the most dangerous activity in everyday life. According to the US Department of Transportation, more than 42,000 people died in car accidents in 2006. This figure does not include a huge number of people injured and also does not reflect multimillion-dollar losses from property damage.
A good car insurance is absolutely necessary both for your own protection and for the protection of other road users. In many states, car insurance is mandatory. A full-coverage insurance policy covers not only damage to your car but also damage to another car or damage to other property during an accident. Full insurance also covers medical expenses associated with the accident and even payments in case of death.
In the absence of insurance, you risk being forced to reimburse the cost of repairing someone else’s car and the costs of treating the injured. So try to find a good car insurance in a company with a high reputation. A good insurance option will give you additional benefits, for example, the possibility of free towing a faulty car.
Home insurance
As you know, Americans are often faced with hurricanes, tornadoes, floods and earthquakes. In addition, the United States has a very high number of house fires. According to official statistics, in 2006, 412,500 homes were damaged by fires. More than 2,500 people died in fires, property worth $7 billion was damaged by fire.
For most Americans, owning a home is a sign of affluence. Try now to imagine what the owner will feel if his or her house damaged by natural disaster or fire was not insured. Home insurance is usually a prerequisite when issuing a home loan. Many home insurance options additionally cover cases such as theft, accidents, damage due to problems with electricity and plumbing.