5 knocks on renters insurance — all bogus

Highlights

• Some 43 million American renters carry no insurance on their homes.
• “Actual cash value” and “replacement cost” mean very different things.
• Renter insurance can cover you for liability away from home. 

Half the 87 million Americans living in rental housing have no insurance on the contents of their home and stand to face a total loss in the even of theft or fire — an increasing concern as we head into the holiday season.

When it comes to whether to purchase renters insurance, the answer should be a resounding yes, says Janet Portman, a lawyer and managing editor of the Nolo legal series, which publishes her book, “Every Tenant’s Legal Guide.”

But for a product that Portman calls, “absolutely a good thing to have,” surprisingly few renters are actually on board. A recent Allstate survey shows some 43 million renters would be left hanging with the total value of their lost or damaged possessions, something most renters simply can’t afford to do.

While there are a lot of reasons why people put off buying renters insurance, Jeff Moree, a product director for Allstate, says the root cause of the problem appears to be a fundamental misunderstanding of the nature of renters insurance. So, with that in mind, we’ll start with some common misconceptions. After that, we’ll look at what you need to know as an informed buyer.

(ARA) – If you’re an adult American, chances are you’re in debt. What would happen to that debt if you should die unexpectedly? It’s not likely your debtors would write it off. It’s far more likely they’ll pursue your estate or surviving spouse to recoup the debt. And money taken from your estate is money taken from your survivors – be they a spouse, children, parents or even siblings.

“If you have debt that will survive you, you need life insurance to protect loved ones left behind,” says Scott Luchesi, president of Garden State Life Insurance. “In today’s economic climate, where debt is more prevalent than at any other time in our history, life insurance is a must for virtually every debt-carrying adult.”

Life insurance is no longer a families-only financial planning tool. Increasingly savvy young, single professionals are also opting for life insurance as a way to ensure that their student loans, credit card debt, car loans and other debts won’t diminish the estate they may leave behind to parents, siblings or other survivors. Families also continue to rely on life insurance to replace the deceased’s income, pay off mortgages and provide for children’s education.

Stiff competition in the insurance industry has created a new crop of affordable, exam-free term products, like Garden State’s BudgetGard. These are continuing to grow in popularity as more consumers realize that term life provides the best coverage value for their money, and is more convenient and less intrusive than applying for a life insurance policy that requires a medical exam.

“With term life, you purchase a policy with affordable monthly premiums for a specific term,” says Luchesi. “If you die during that term, your beneficiary receives the full policy value, just as they would with a whole life policy. The advantage to you is that the premiums are generally far lower for term than with other types of policies, and you can use that savings in premium to apply more money towards reducing your debt more quickly or saving for your future.”

With BudgetGard term life, you won’t need to take a health exam and your premium is guaranteed not to increase for the level premium period you choose – one, seven, 15 or even 20 years.

To obtain a fast, free quote for term life insurance, visit www.budgetgard.com.