7 Types of Insurance You Should Always Have
(Commons Photo Credit: Source)
Insurance! Ugh, we hate to pay for it, but we'd hate it even more if we didn't have it and needed it! So, what types of insurance are a must?! Stick around and today I'll tell you exactly what you need to know.
Today, I want to tell you about seven types of insurance you should absolutely have.
Just as a reminder, I am not licensed in, nor do I sell, ANY financial products, including insurance. I am here solely to provide you the information needed to do what's in your best interest.
So, let’s begin...
1. Auto Insurance
Most states require you have auto insurance; but, you need to make sure that you not only have it but have the correct amount. How do you know whether or not you have the right amount? The best way to do that is by getting an independent broker and having them find you an insurance suited for you and your needs.
This is one of the most important insurances, so be sure you have this in place! Even if it is not required in your state, auto insurance is a must have.
2. Homeowners or Renters Insurance
If you own a home, you need to have homeowners insurance. If you own a condo, you need to have condo insurance. And, if you are a renter, you need to have renters insurance, even though it's the kind most people ignore.
Typically, homeowners insurance is required by a mortgage and is included in the escrow. Sometimes homeowners forget about this protection, but you do need to make sure you have the right coverage as well. Your independent broker can assist you in this process as well.
Renters insurance is something many overlook. I have heard stories of this happening, including an incident where a home burned down and the owner showed up at the property, telling the renters he was sorry for the situation. The renters responded, asking when they would receive the money to replace their stuff.
Unfortunately, the owner couldn’t even replace their stuff if he wanted to because he didn’t have a vested interest. In fact, because the renters did not have proper coverage in place, none of their personal items lost in the fire could be covered.
Owners are not and can not be responsible for your stuff! They are only responsible for the structure. You need to make sure you have a small policy, which typically costs $15-$20 per month. It is very inexpensive and something you cannot pass up.
The last thing you want is for all of it to go up in smoke!
3. Personal Umbrella Policy (PUP)
Sometimes the perception is you don’t have to worry about it because the people who often get hurt are close friends. However, you don’t know if that person might end up with significant medical expenses or can take care of those things themselves; thus, they file through their insurance company who then comes after you.
Having a PUP will protect you if an unexpected event were to happen. The cost of the coverage is small, but the security it provides is huge!
4. Medical Insurance
It is an absolute necessity in today’s day and age to have medical insurance! It is also ridiculously expensive!!
There is a constant dance taking place between patient, medical provider and insurer. If you don’t have this coverage, you could be up a creek. In fact, the number one cause for bankruptcy is medical expenses!
So, do not live without medical coverage, even if you expect to pay out of pocket and only use it in emergencies. No one today should be without medical insurance!
5. Long-Term Disability Insurance (LTD)
You must have this in place!
Now, I am an advocate for an emergency fund in lieu of a short-term disability policy, but short-term disability als0 might be provided through your employer at no cost. Sometimes long-term is provided through your employer as well, but it usually only goes to a certain level.
In fact, long-term disability insurance is typically cheaper when purchased through a group plan.
Who is going to take care of you if you are disabled for the rest of your life? What if you are out of work for an extended length of time and don’t have a savings? What if you are injured and can no longer work in the capacity you once did?
Long-term disability insurance is extremely important and you need to have it in place. For more about this see my recent video here.
Okay, so these last two only apply if you meet the criteria. But, let's discuss them.
6. Life Insurance
You need to have life insurance if you have any dependents. It should be eight to ten times your gross annual income, despite what is provided through your work.
Be sure to check out my previous video, "͞What Kind of Life Insurance Should You Buy?"
If you don’t have dependents, then you don’t have an insurable need for this policy.
7. Long-Term Care Insurance (LTC)
This is also known in layman's terms as Nursing Home Insurance.
It is not just for care in a nursing home but for private care and in-home nursing as well.
Long-term care insurance can be expensive so you may be convinced to get into it before needed. You can, however, invest those dollars elsewhere so your money can grow and so you'll have the funds available when the time comes.
When do you need it?
Before age sixty, your chances of needing nursing care are less than 1%! But, once you hit 60, those percentages begin to sky rocket. The average care for someone in those living environments is $125,000 a year.
So, I encourage you to mark your calendar. When you turn sixty, get your policy in place. Happy birthday to you!
Question: So, will you get the coverage you need? Let me know in the comments. Avoid those catastrophic incidences or being unprepared for what may come. Get some security by getting insured! Need help navigating and being educated on the insurance realm of personal finances?! No problem.
Reach out to me anytime or book a free consultation. Well, I hope this information has been helpful to you so you can have those insurances in place when you need them, keeping your wallet heavy and your heart light.
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