Insurance companies are professional risk-takers that provide protection against financial loss caused by illness, death, accidents, and other destructive or damaging events. When you purchase insurance, you pool your risk with others. This is called risk management. You pay (or your employer pays for you) a premium to an insurance company that in return pays you or someone else for the damaging effects of a loss, if it occurs.

Evaluating your insurance needs, or risk, is a key part of your financial planning. How much you need and what type of coverage you should buy is a decision only you can make after careful investigation. The average family spends 11 percent of its disposable income on insurance each year. Those who take the time, will discover that prices vary widely among companies for the same coverage, and those who shop for the best rate can save several hundred dollars every year by comparison shopping.

When selecting insurance, you should:

• Select the type and amount to fit your unique situation.

• Choose a company with a strong financial rating.

• Select enough coverage to insure assets adequately.

• Don't risk more than you can afford to lose.

• Select the highest deductible you can afford.

• Avoid duplicating coverage.

• Pay annually rather than monthly or quarterly.

• Shop around and pay a reasonable, competitive rate.

• Always read a policy and understand it before signing.

• Property (for homeowners or renters)

• Auto

• Comprehensive/liability

• Life

• Disability

• Health or medical

After reading the following pages, use the Insurance Evaluation and Goals worksheet to evaulate your current insurance coverage and plan for future needs.