Are you an employee or an independent business person dependent on revenue derived from brow sweat? Are you holding some personal debt or debt on your place of residence or investment property? Do you have dependents that rely on you today and in the future to provide for their financial security? Chances are the solution to at least one of those questions is a definite yes for most of us. Learn more about Commercial Insurance Lafayette LA.
Then, you are left to make a choice. Do you accept the risk and trust you will never get sick or disabled and have to stop working or do not die prematurely leaving your dependents with large amounts of debt and insufficient financial resources. Or, you plan and manage the risk by taking out adequate insurance.
The prospect of losing our ability to earn income and die prematurely may seem a little unlikely to give it proper consideration for most of us. Over all, on the hand of optimism, it is a natural propensity to waive these problems and believe that ‘it would never happen to me.’ But the fact is that every day of the week it happens to people much as you do. Yeah, how can you prepare such risks and manage them? Well, there are a variety of different insurances specifically designed to meet such specific risks, the mixture of which can provide a comprehensive plan for risk protection. Below is a brief overview of the most important real estate investor personal insurances.
Revenue Coverage Policies
Economic security policies will provide you with an pension in case you are fully or partly ill and can not function. Insurance on income protection provides up to 75 per cent of your income from pre-disability. Benefits are due until a specified waiting time has elapsed and are valid for a fixed duration (the reward span) so that you stay fully or partly impaired.
Life insurance is not going to do anything for you as the insured but it is going to do a lot for the dependents whom you left behind. Life insurance provides a lump sum to your dependents that can be used to pay off any obligations you have (e.g. credit card, home loan, personal loans, investment loans, etc.), provide for funeral expenses, and provide a reasonable investment amount to generate sufficient continuing income to support your dependents.
If you are bearing debt (like most property investors) and you do not yet have ample financial means to help your dependents should you die early, so life insurance is completely important. Losing anyone near would be one of the most stressful things in life and one extra burden your dependents should do without is that of paying the mortgage without your salary and face the possibility of returning to the market for your investment property to free up enough funds to cover living expenses. It may very well take several months before your dependents may liquidate the assets and recover the mortgage, given the relative illiquidity of the land. All this during a time that should otherwise be spent crying, not scraping around for money to meet living expenses or negotiating with brokers and investors in the real estate business.
Insurance against Complete and Irreversible Damage (TPD)
TPD insurance provides you with a lump sum payment in case you become totally disabled as a result of injury or illness and satisfy the TPD definition of the policy. TPD policies can be used to pay off existing loans, provide for any medical costs not protected by your health insurance, provide for any necessary changes to your home or vehicle, and provide you with an investment amount that is sufficient to generate ongoing revenue to account for your lost income.
Yet again, if you bear debt and you do not have adequate financial means to help yourself and your dependants if you happen to become impaired, then TPD is an utter requirement, particularly though you have benefits for income security. Note that income protection insurance provides just up to 75% of the pre-disability benefits which is inadequate for most people to support both their current lifestyle and the goals of wealth creation, let alone their increased living costs as a result of their impairment