Protecting your assets

Protecting your assets

Life is full of risks and uncertainties. That is why people buy insurance that will protect themselves, their families and their property. Of course, the decision to purchase insurance involves weighing the costs and benefits.
  • If your home is damaged by fire or a storm, having insurance would help pay for repairs.
  • If you become sick, having health insurance will help pay your medical costs.
  • Insurance that people elect to buy is private insurance.
There are Social Insurance Programs provided by the government that also protect individuals and their families against hardships and uncertainties such as unemployment, disabilities, retirement, health care, and death of a family’s wage earner.
  • Social Insurance is required by state and federal laws, and it is, therefore, mandatory that individuals and businesses (employers) pay for these programs.
Type of insuranceWhat it protects
Health insuranceHealth insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured.
Auto insuranceAuto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft.
Life insuranceLife insurance is a contract between an insurer and a policy holder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death fo the insured.
Property insuranceProperty insurance is a broad term for a series of policies that provide either property protection coverage (such as damage from natural disasters or fire) or liability coverage.
Disability insuranceDisability insurance will provide income in the event a worker is unable to perform their work and earn money due to a disability.
Long-term care insuranceLong-term care insurance is coverage that will pay for assisted living, nursing home care or home healthcare in the event you are unable to care for yourself because of a chronic condition or disability.
Government provided insuranceThe US government funds a number of insurance plans paid for by taxpayers: Medicare, Medicaid, Children's and Veteran's healthcare, Unemployment insurance, Social Security including Disability.

How insurance works

It is important to become informed about insurance types and costs.
  • Choosing insurance will require a financial commitment on your part and you want to make sure the costs are affordable.
  • You can keep costs low by engaging in behavior that protects against risk. For example, a clean driving record will lower the cost of your car insurance.
Buying insurance is basically a contract that we enter with an insurance company, e.g. Geico, State Farm, Prudential and many others.
  • We purchase an insurance policy and pay the insurance company fixed PREMIUMS over time in order to maintain insurance coverage.
  • Payments to maintain your insurance policy would be a fixed expense in your budget.
Let’s say you buy auto insurance (mandatory for car owners in many states). Each month you would pay the insurance company a certain amount of money to insure your car and to cover you as a driver.
  • If you get into an accident, the insurance company will pay for your loss in that situation. That could mean paying for repairs to your car or someone else’s car. It could mean paying for damaged property.
  • Very often, there will be a DEDUCTIBLE associated with your policy, that the insurer will require you to contribute toward the overall cost.
Ultimately, the insurance company wants to make money on your policy. So, they want to collect your premiums and hopefully not have to pay any money out.
  • The amount of your premium is based on a determination by the insurance company of how much of a risk you are.
  • It is always the case that when an insurance company needs to pay out on your policy, your premiums will likely go up.
Major insurance companies sometimes have millions of policyholders who pay premiums, but only a small percentage might ever receive a payment for a loss.
  • This is how they can take in relatively small amounts of money from individual consumers for premiums and yet pay out very large sums if an accident or other hardship occurs.

Protecting who you are

IDENTITY THEFT is a growing problem in the U.S. and worldwide affecting millions of people every year. Thieves can steal critical information about you, like your name, address, telephone number, bank account, or credit card numbers, and—most dangerous—your Social Security number.
  • Although individuals probably cannot entirely prevent this theft, risks can be minimized by being vigilant and careful about protecting your personal information, especially when using computers and smartphones.

Steps to protect your identity

  • Safeguard your personal records by tearing up or shredding sensitive materials such as credit applications or credit offers, insurance forms, tax information medical statements, bank statements, expired credit cards.
  • Don't put personal information online, like your birth date, on a computer home page, personal computer profile, or social media website.
  • Never provide personal or financial information unless a website site is secure. (Look for a security symbol such as an unbroken padlock and a Web browser that starts with “https” rather than simply “http.” Right-click the padlock to make sure it’s up to date.)
  • Carry only the personal information that you need on a regular basis; leave the rest at home in a safe place.
    • Never carry around your social security card and give out your number only when absolutely required.
    • Use different complex passwords and change them regularly.
      • Avoid using personal information as a password or number sequences.

Protecting your computer

Avoid scams

For example, if you get a supposed IRS email asking for personal or financial information, delete it or send it to the IRS at phishing@irs.gov for investigation. The IRS never initiates contact with taxpayers by email, text messages, or social media.

Don't be fooled by links to what looks like the real IRS website—that too could be a fraud.

If You're a victim of Identity Theft, visit identitytheft.gov Also, keep an eye on your credit report and respond to any inaccurate information. It’s always a good idea to file your taxes early—as soon as you can—before a scammer does.

Tips to protect your computer

  • Use a firewall and secure browser.
  • Don't download files from strangers.
  • Maintain current virus protection.
  • Password-protect any personal or financial information.
  • Avoid automatic log-in processes (which store your account name and password).
  • When you dispose of your computer, delete personal information and completely overwrite the hard drive.

Resources for learning more about insurance


How to protect your identity
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