Insurance is a necessary part of life, but you’ll likely have questions about your coverage no matter what life stage you’re in. Here, we’re answering some common insurance questions to help you feel more prepared when the subject comes up.
1. How do I choose the right employee benefits and insurance options?
Choosing your employee benefits is a key part of starting a new job. Employers can offer a wide range of options, and it’s important to consider each before making your decision.
Oftentimes, your worker’s compensation insurance will be automatically applied when you’re hired. However, you’ll have to opt into other benefits options, including a number of insurances from employer-provided health, dental, vision, disability and life insurance to hospital indemnity, critical illness, and legal insurance options.
2. How are my insurance premiums determined?
Insurance premiums depend on a number of factors. The first factor considered is where you get your insurance coverage. If you enroll in group insurance through your workplace, your premiums will be the same as other employees’ at your organization who enroll in the same plan. If you purchase individual insurance coverage, your premium payments may be determined through the process of underwriting, which examines key parts of your background (including financial and medical details).
A provider of individual insurance policies will take your regular activities, history, and risk level to the insurance provider into account when determining your premiums. For example, individual health insurance policies will consider your multiple factors for your premium, including:
- Habits and activities
- Health history
- Pre-existing conditions
3. Should I have life insurance?
Life insurance may not feel like a priority when you’re young, but having this benefit can help protect your loved ones if the unexpected happens. Life insurance can assist with any outstanding bills — such as rent, a mortgage, car payments, or credit card debt — as well as funeral costs. You should take any student loan debt or other major expenses into consideration to help determine how much life insurance you need.
Many employers offer life insurance coverage, but the policy may not be portable if you change jobs. When looking for a new job, be sure to ask your employer about what type of life insurance they offer.
4. Should I enroll in disability insurance?
You should think of disability insurance as insurance for your paycheck, in case of an illness or injury. The amount of coverage you need depends on your individual circumstances. Disability insurance isn’t just for high-risk jobs, but also for pregnancy, mental health needs, and injuries that happen outside of the workplace that prevent you from doing your job. When or if you’re job hunting, find out if your potential new employer offers disability coverage and consider purchasing an individual policy to supplement it as needed.
5. Do I need homeowners’ insurance?
Typically, mortgage lenders require you to buy homeowners insurance. You may not be approved unless you purchase it in the amounts specified by your individual lender. However, it’s legal to own a home without a homeowners insurance policy if you choose to buy without a mortgage loan or inherit your property.
Even if you aren’t required to purchase a home insurance policy, you’ll likely want to buy one anyway. This will help protect you, your belongings, and those visiting your home from major expenses, like damage repair, theft, and liability — all of which can get expensive quickly.
6. How much car insurance do I need?
Almost all states require a certain level of car insurance, meaning you typically can’t drive a car without purchasing an insurance policy first. Usually, car insurance policies include collision, comprehensive, property damage, and bodily injury coverages to protect you in the case of an accident or no-fault incident. However, each state’s specific laws and requirements differ.
To be legally compliant, you should follow your state’s auto insurance requirements. But to be insured to cover a serious accident, you will likely need more than the minimum coverage.
For example, a major accident, theft, or damage from a natural disaster may cost more coverage than the minimum set by your state. In order to determine what coverage amounts work best for you, analyze your specific habits, circumstances, and environment to decide if basic coverage is enough or if you need a little more.
Ask your insurance questions early and often
Insurance can be tough to navigate when you’re faced with so many choices. Always ask your benefits administrator for resources and guidance if you’re curious about the options available to you and read up on benefits topics to stay informed.
Now that you know the answers to common insurance questions, you can feel better prepared as you start or continue your insurance journey.