Insurance basics guide

Insurance transfers the risk of a big financial loss to an insurer in exchange for premiums. The goal is to cover losses you cannot afford to pay yourself: medical bills, liability, disability, death of a breadwinner or major property damage.

Section 01

The insurance you probably need

  • Health insurance.
  • Term life insurance if someone depends on your income.
  • Disability insurance if you need your paycheque to live.
  • Homeowners or renters insurance.
  • Auto insurance where required.
Section 02

Deductibles and premiums

A higher deductible lowers the premium. Choose a deductible you could actually pay tomorrow from savings, not one so high that a claim would break you.

Section 03

Insurance to think twice about

Whole life insurance, extended warranties, credit card protection and small-ticket policies often cost more than they cover. Self-insure the small stuff; insure the big stuff.

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Section 01

FAQ

How much life insurance do I need?

A common starting point is ten times your annual income, adjusted for debts, dependents and existing savings.

Does renters insurance matter?

Yes. It is cheap and covers your belongings plus liability if someone is injured in your rental.

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How the interest calculator estimates compound growth

Compound interest applies each period’s rate to the starting balance plus previously credited interest. This interest computation differs from simple interest, which calculates interest only on the original principal. A daily compound interest calculator uses more compounding periods than a monthly or annual model, although the practical difference depends on the stated rate, account terms, and length of time.

Enter a starting amount, recurring contribution, assumed return, compounding frequency, and time horizon. The resulting future value calculator estimate is not a guarantee, particularly when modeling an investment with changing returns. For deposit accounts such as high yield savings, compare the annual percentage yield rather than relying only on the stated interest rate. The rule of 72 can provide a rough mental estimate, but a calculator offers more detail.

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