Investing in insurance has not just become popular nowadays. It has actually become a necessity for people who wish to live a happy life when they’re older. For example, more and more younger people are investing in retirement plans to insure their life when they retire from work. And who wouldn’t when the insurance you’ve been investing in for years will give you the funds you need to live a quality life later on?
However, we have different plans for and needs in the future. These are the reasons why one person’s plan may vary from another. There are considerations that have to be carefully weighed before deciding what type of insurance plan to purchase. These also affect the number and type of covers to be included in the plan.
So, if you’re asking whether you need to add excess cover in your insurance or not, read on below.
What are your plans for the future?
If you are planning to live a simple life after retirement, then you may not need excess cover to your insurance. If you just intend to live your life at home or in your small garden or farm, you don’t need excesses. However, you wish to travel a lot with your partner, it would be best if you add excess cover to your plan.
For example, if you intend to travel around the world frequently, having an excess cover will prove to be very beneficial as travels involve a lot of costs. When you’re in another country, you can’t be sure whether there will be unnecessary costs or not. Unwanted accidents may also happen, and these can also incur you a lot of costs. So, to be safe, and to have something to count on, it’s better to add excess cover in your plan.
How much is your income?
Another huge consideration is your income. Even if you really want to add excess cover, but your income does not permit it, you can’t do anything about it. Unless, you look for other part-time jobs that make you more capable of paying huge contributions to your insurance plan.
However, if you started investing in insurance at a younger age, then you have more time and more money to contribute to your plan. This can allow you to add excess cover if you deem necessary. Insurance veterans actually advise people to start investing early.
What type of insurance do you plan to avail?
For retirement plans, there are several types of insurance you can choose from. Two of the most popular are annuities and Individual Retirement Accounts (IRAs). When choosing from these two, it is important to consider the taxation measures and limit to contributions.
If you are really saving for your silver years, an annuity is the best plan. It is inherently tax-deferred, so adding excess travel insurance is not a problem. Though taxation happens when you’re withdrawing the payouts, it is still better than IRAs as there is no limit in the contributions during your investment years. As it seems, an annuity can allow you to really prepare for the future by adding excess travel insurance in your plan.