What Types of Insurance Do I Really Need? | theSkimm
claw machine picking up different kinds of insuranceDaniel Fishel
The Story 

You can’t control the future. But you can make smart moves that protect you – and your wallet – no matter what comes next. Like buying the right types of insurance.

I like to live dangerously.

That could get you in a lot of financial trouble. Consider these your must-haves:

  • Health. Uncle Sam may not make you pay a penalty for not having medical insurance anymore, but have you ever seen how much a 15-min doc visit or one of your prescriptions costs without it? Not pretty. If you can’t get coverage from your employer or union, here are a few other options.
  • Disability. A way to keep getting paid if you can’t work because you’re sick, hurt or taking care of a new baby. A lot of employers include both short- and long-term disability insurance as a benefit. You can also buy an individual policy.
  • Car. Most states require you to have coverage in case you damage property or cause an accident where someone gets hurt. But you can upgrade your policy to cover theft or damage from an accident or natural disaster.
  • Homeowners or renters. Required by most mortgage lenders and some landlords. Standard policies typically cover your stuff, provide legal protection if someone gets hurt at your house (and even away from your house, like if your dog bites someone at the park), and helps pay for hotels and meals if you have to relocate after a covered event. Btw, floods and earthquakes are rarely covered, so look into additional policies if you live in a disaster-prone area.

Exactly how much insurance you need depends on your lifestyle and how comfy you are with risk. PS: if your net worth is higher than $1M, you might want to get an umbrella policy. Because the more you have, the more you stand to lose. Umbrella insurance picks up the slack for your home, car, and other insurance policies by covering you once you’ve reached the cap.

Wow, that seems like a lot. 

We’re still going. If anyone depends on your income (kids, partners, parents, siblings, etc.), life insurance can help you keep supporting them in a worst-case scenario. One rule of thumb is to buy enough to replace about 10 times your salary. Consider your job, debt, assets, and dependents to figure out the exact number that works for you. Psst...the younger and healthier you are when you buy, the lower your life insurance premiums should be.

Are we done yet?

Almost. There are a few other types of insurance you can consider. Like pet insurance, travel insurance, and wedding insurance. Just make sure to read the fine print to understand what you’re signing up for. And if there are any gaps you should know about and budget to pay for on your own. For example, pet insurance typically covers unexpected accidents or illness, but not regular checkups or teeth cleanings.

Where do I buy all these insurance policies?

Break out your employee handbook. Some employers go beyond the basic medical/vision/dental package and offer pet insurance or discounted life insurance. But you can always buy your own, too. Get free quotes from a few different, reputable providers. Comparison shopping almost always = savings.

theSkimm 

Insurance is the safety net that can catch you – and your wallet – if something goes wrong. It might seem expensive, but living without coverage can lead to waaay bigger bills. Consider what you have, how you live, and what you can afford. Then get the basics and weigh the benefits of other policies as life goes on.

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