June 28 is Insurance Awareness Day. Although insurance has been on all of our minds lately, largely due to the Affordable Care Act, there are certain types of insurance policies that are often overlooked. Despite this, they can be just as important as a standard healthcare plan. What are they? We spoke with some experts to get their takes and recommendations.
Replacement Cost Rider
Nancy D. Butler, from Above All Else, Success in Life and Business, recommends a replacement cost rider on homeowner’s insurance. “Without a replacement cost rider, the insurance company will normally pay you what the lost or damaged item was worth at that the time it was damaged or lost. For example, if you had carpet damage due to fire or flood, the insurance company would pay you the current value of your 10-year-old carpet, let’s say $200. If you had a replacement cost rider the insurance company would pay the cost to replace the carpet, which may actually be closer to $2,000. The cost to add a replacement cost rider to your homeowner’s insurance policy is normally low and well worth it.”
Short-Term Medical Insurance
Andrew J. Zurbuch, from HealthPlanBrokers.com, recommends that consumers consider short-term medical insurance. “Many consumers go without health insurance temporarily while waiting to get coverage through a group health plan or Medicare. Examples include recently leaving the military, divorce, students turning age 26, and retirement.” Short-term medical insurance may help keep you covered while you find a health plan.
Disability Insurance
Zurbuch also recommends researching disability insurance. “Both long-term and short-term disability insurance coverage. Many consumers just don’t see or realize the need for this type of insurance. The pitfalls of not having it are tremendous because going without it could lead to serious negative personal financial issues and even bankruptcy.”
Butler concurs, “Consider if you were sick or hurt and could not work. What would you and/or your family have to cut out of the budget to manage on any remaining income? Would the children still be able to attend college? Would your spouse be able to retire at a reasonable age? What other important goals would end? Not only would you be disabled and unable to provide income to yourself or your family, but you would be causing additional expense.”
Long-Term Care Insurance
Another type of insurance that many don’t think about is long-term care insurance. Zurbuch explains, “Many Americans age 50 and over don’t have this type of coverage, yet the statistics show a high percentage will need it and could use it someday. The minimum monthly average nursing home stay could be estimated at $5,000.” Considering this expense, Zurbuch recommends that consumers should research it further.
Umbrella Policy
Another policy that is usually overlooked, Butler explains, is an umbrella policy. “An umbrella policy can be fairly inexpensive and can cover costs other policies don’t pay for. For example, if you or your child were in a car accident that involved others, your auto coverage may not be sufficient to cover the large medical and other expenses for everyone you are responsible for. If this were to happen, you could run the risk of losing your home and other assets. The first time I purchased an umbrella policy was when my teenage daughter obtained her driver’s license. I did not want to risk losing what I had spent years building because of an unfortunate accident.”
Kids’ Summer Camp Health Insurance
Steve Dasseos, founder of TripInsuranceStore.com, recommends reconsidering your current health insurance plan if you’re planning on sending your little ones to summer camp. “Before sending the kids off to camp or on teen trips, check your health insurance policy. Some plans won’t cover emergency-room visits outside your area. Others won’t cover helicopter evacuations. If your plan has restrictions, ask the camp or tour what it covers.”
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