Insurance plans that everyone really needs

To be honest, insurance feels like an annoying thing that just saps us of cash. After all, you’re paying to be covered or reimbursed for something that may never happen. But protecting your assets is the only real way of ensuring you don’t hit financial difficulties or ruin throughout your life. So paying for insurance is a bittersweet affair. Also, insurance doesn’t come cheap. Trying to save money, pay insurance and have enough expendable income to maintain your quality of life is difficult. But you’re not alone. Everyone is in the same boat. Even someone who appears to live a far more lavish lifestyle and is further up the pay grade, is juggling some steep monthly expenses. As, insuring an Aston Martin costs far more than insuring a second-hand Honda Civic.

You simply must safeguard your possessions though. You also need to protect yourself medically. A visit to the hospital, causing a car accident, having your house broken into are incidences that can happen to anyone but they are costly affairs. They can truly break the bank. With no insurance or emergency cover you could find yourself steeped in debt that will take years to pay off.

Here are four types of insurance you simply cannot do without.

Life insurance

This is of particular importance to the people that are dependant on you. You need to ascertain who would be directly impacted in a negative capacity if you were to pass away. This is not a great thing to think about, it’s not easy to talk about to your family either, but it’s necessary. Of course, if you have children they would need to be covered by your life insurance so that they may remain financially stable even after your passing. You can set up your life insurance policy to pay out the money you would earn if you remained alive. This means factoring in your current pay cheque and considering what your earnings would be up until you would retire. This entire amount is what you should insure against.

Medical insurance

If you’ve ever had a family member stay in hospital, even for a small procedure or treatment, you’ll know that the cost of medical care is exorbitant and growing. Even a visit to your GP is expensive. Add to that the purchase of medication and you’re spending a big chunk of change. Worst of all, the expense is unforeseen. You can’t predict when you’ll fall ill or require medical attention. What’s more, the public healthcare facilities in South Africa are sub-standard and this means private healthcare is your only real option. Waiting for urgent treatment is dangerous and unfortunately that’s the case in the state hospitals. The different types of hospital insurance in South Africa that you can sign up for differ greatly in price. But if you run a quick Google search for hospital insurance in South Africa, you find many results that offer a cost effective insurance option or a hospital plan option. Comprehensive medical aid is simply too expensive for some but with the two options mentioned above your premiums are far more affordable and you will be covered for the most expensive types of medical care. Namely, the likes of treatment or surgery in hospital.

Homeowner insurance

If you own a property it is likely your biggest asset. You need to insure your property for all types of problems. You need to be covered for the repair of structural damage or replacement of actual structures and the contents inside of your home. If you renovate your home you will need to upgrade your homeowner’s insurance policy too. It’s possible to insure your home for more or less than you bought it for. This has to do with the age of the structure and how you’ve looked after it. A rough estimate can be found if you research how much local contractors charge per square foot of building a residential home. Multiply the cost of one square foot by the square footage of your actual home and that’ll give you an idea of how much the space you want to insure will cost. It’s a good idea to cover liability for injuries that might occur on your property.

Car insurance

This is a painful thing to pay each month considering your car is an expensive yet depreciating asset. However, it’s really quite simple. If your car is written off in an accident or stolen you will still have to continue with your repayments even though the car no longer exists. This means years of paying for the vehicle and potentially not being able to afford another one. Similarly, if you are involved in an accident that is your fault and someone is injured or the other vehicle is badly damaged, the cost is your problem. Again, this could see you drowning in debt if you are not covered with insurance. What’s more, accidents happen very quickly and car theft is a very real problem in South Africa. You cannot sit back and say “it won’t happen to me” because it can happen to everyone. Vehicle insurance is a must-have. Even as a student driving their first jalopy, they must have vehicle insurance.