This or That? Insurance Edition

Looking for insurance is not something many people look forward to. To make it even more dreadful, there are many different types of things to analyze and choices to make. Often times we find our selves wondering “Should I go with this? Or that?”  In this blog post we will discuss two very common dilemmas: full coverage or state minimum auto insurance? Whole-life or term-life insurance? 

Full Coverage or State Minimum Auto Insurance Coverage?

Car Insurance liability minimums are governed at the state level.  Every driver must have at least the minimum required liability car insurance to be allowed to operate a vehicle. In other words, the driver must have a way to cover the costs of injury or damage to another driver in the event of an accident. What you absolutely must purchase and maintain for Missouri is the following¹:

• $25,000 for bodily injury, per person.
• $50,000 for total bodily injury (when multiple people are injured.)
• $10,000 for total property damage.

To reinforce this as much as possible, we must show proof of insurance when registering a vehicle, renewing license plates, and of course keeping proof of insurance in your vehicle at all times. The DOR (Department of Revenue) has the right at ANY time to request that you show proof of insurance, and if you cannot do so your license may be suspended.

If you are pulled over without proof of insurance, you are subject to a ticket. Along with a ticket you could potentially receive 4 points on your driving record, be ordered an order of supervision on your insurance status, or even have your drivers license suspended. This is why it is so important to always have proof of insurance in your vehicle and keep your drivers license on you.

Full coverage insurance is considered a combination of collision and comprehensive coverage.  In common terms, full coverage covers the damages to your car if you get into an accident.  If you bought your car with a bank loan they will require you purchase full coverage insurance.  The details and amount of protection vary by the company issuing the policy and can include the following:

• State-required liability or no-fault insurance coverage (for bodily injury/property damages to others.)
• Collision coverage (for damages to your vehicle.)
• Comprehensive coverage (for vandalism, theft, and other damages that are not in the result of an accident.)

Not every person or situation needs full coverage insurance.  For example if you own an older car, it may not make sense to pay higher premiums for the cost of full coverage when it outweighs the value of your car.  Consult with an agent about your situation to determine what coverages are appropriate for your family that fit into a budget you can afford.

Whole-Life or Term-Life Insurance?

A whole-life insurance policy includes a death benefit and also a savings component where cash value may accumulate. This type of policy guarantees payment of a death benefit to beneficiaries in exchange for level, regularly-due premium payments. The death benefit of a whole-life insurance policy is typically a set amount of the policy contract.  The policy remains inforce for your ‘whole life’ or until you stop paying the premiums.

A term-life insurance policy provides coverage over a certain period of time. It is mostly meant to be relied on in a premature death situation to help out with loss of income for a family. Common term lengths are 10, 20, or 30 years with the death benefit (payout) and the cost remaining the same throughout the entire term.

When purchasing a term-life insurance policy, you’ll want to choose a time frame that you think would be the most vulnerable and when the help would be needed most, and should select an amount that could replace your income to help your family.

The idea with a term policy is that after it runs its course, your family will be in a place or at an age where they no longer need the financial assistance if an unexpected death occurs.

This or That? As you can see, there are a lot of things to consider with any type of insurance policy. Always make sure to do your research and know what you are getting into. It’s never a bad idea to re-analyze your needs to see if you need to make any changes to what you are getting.

Stop by The Resource Center or give us a call at 417-882-1800 anytime for more information. 417-882-1800

Sources:

1. https://www.dmv.org/
2. https://www.investopedia.com/terms/w/wholelife.asp
3. https://www.nerdwallet.com/blog/insurance/what-is-the-difference-between-term-whole-life-insurance/

We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. We are able to provide you with information but not guidance or advice related to federal benefits. Our firm is not affiliated with the U.S. government or any governmental agency.  Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center are not affiliated companies.