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Why is insurance such a key part of my overall financial plan?

What things should I insure?
What kinds of insurance should I avoid?
Shopping for insurance - where do I start?
Where should I purchase insurance?
Is price all that matters?
How important is having an agent?
Where else can I get information about insurance?

There are few financial topics more important (and, sadly, more mundane) than insurance. No matter how diligently you build your financial empire, failure to purchase adequate insurance can put you in a desperate hole in a heartbeat. On the other side of the coin, few things will attack your investment returns more insidiously than paying too much for insurance or, worse, paying for insurance you don't need.

So, you may be thinking now, "I don't need insurance." To that we say: Most likely you do. If you own things that will be very hard to replace without facing severe financial hardship, these things ought to be insured. In general, think of insurance as "hardship avoidance," not "convenience" or "hitting the jackpot."

On the one hand, insurance has all the lure of a state lottery. Individual tickets don't cost much (relatively speaking), and if your number comes up, hey, you get the big check! Trust us, though. You don't want this check.

Before you actually get the check, you'll have to complete your end of the bargain. No biggie. You just have to get some stuff stolen from your home, or damage your car, or become disabled, or die.

Given this backdrop, it's no wonder that few people list insurance among their hobbies, even in a country that lays down more than $640 billion in legal wagers each year.

Fun or no fun, however, insurance is one finance topic that you don't want to overlook. Contrary to some common perceptions, insurance is not a rip-off. For most people, it is a necessary and valuable financial service.

Whatever you do, don't lose your insurance bets by skipping premium payments. Since insurance has little impact on daily life, it's easy to overlook these payments. If you really need the insurance, these premiums should fall behind only food and shelter in your list of priorities, and certainly ahead of investing.

We created this Foolish Insurance Resource Center to inform your insurance bets by covering the three key factors that should frame them:

What types of insurance do you need?
How much insurance do you need?
How do you get all of this coverage at the lowest cost?

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Affordable Health Plans - FREE Instant Quote!