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The importance of insurance

January 13th, 2012 -

It is important to protect yourself, your family and the things that you have worked hard to get. This is where insurance is vital.

There a number of different insurances and all are important depending on your situation and needs. You can insure your health, life, home, home contents, car, loan repayments, income … the list goes on.

Obviously, not everyone needs or can afford every type of insurance so it is important to consider a number of things before making any decision. The Commission for Financial Literacy and Retirement suggest that you should ask yourself four questions when considering what type of insurance you need:

1. What is the risk you would be insuring against?
2. What are the chances of it occurring?
3. What would happen?
4. How much would it cost?

Once you have decided what insurances you need, it is important to shop around to get the best deal for you. Many insurance companies offer better rates if you bundle your insurances.

It is also important to review your insurances regularly to ensure that you are sufficiently covered as well as receiving the best deal.

You may wish to approach a skilled insurance broker or advisor for advice as they can provide independent advice as to what insurance best suits your needs and will ensure your security.

The Sorted website has a wealth of information and guidelines which are all available free – http://www.sorted.org.nz/insurance

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