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Insurance Needs: What Type of Policies Do You Need?

insurance needsEveryone has their own insurance needs. Insurance is a financial instrument to protect you from the cost of a catastrophe.  When you and others pay into a financial pool, the insurer will cover the expenses of a financial crisis.

Costs such as:

  • injury
  • property damage
  • injury
  • illness

Insurance is based on the economic principle of a transfer of risk. You are transferring the risk of a financial loss after experiencing a personal catastrophe to the insurance company. Often it is a financial risk that you cannot afford to handle on your own.

While you pay hundreds of dollars in premiums each year, insurance companies must pay out tens of thousands if something happens to you or your property.  There is one catch, though. You can’t get insured after a disaster. You must have gotten it before.

Below we’ll discuss some of your basic insurance needs.

Insurance Needs: What Type of Policies Do You Need?

Since you can’t foretell the future, you don’t know whether you will need to insure anything. However, you are only insurable when you aren’t aware of a possible financial disaster. 

While there are many imaginable types of insurance you might need for your life, three types almost everyone needs are:

  • life,
  • health, and
  • homeowners/renters.

Keep reading to find out more.

Insure Your Life

The purpose of insuring your life is to cover your beneficiaries when you die. Insurers refer to this payout as a death benefit. It is especially important to insure your life if you are your family’s primary caregiver and want to leave money for your:

  • stay-at-home spouse,
  • an elderly parent,
  • an aging relative, or
  • your young children.

This is in the event anything should happen to you. 

When considering life insurance, you must clearly understand term life insurance vs whole.  

While there are several differences between term life insurance and whole life insurance, the primary one is the length of the policy. A term life policy will only last for a predetermined time. A whole life policy will last for your entire life, the policy ending only after you pass away. These options will also determine price so there is a lot to consider when choosing the right life policy. 

Health Insurance 

Health coverage can mean the difference between life and death. If you don’t have health coverage and get seriously ill, the high cost of medical care may result in you not having enough money to pay for life-saving treatments. 

Here are some ways you can get health coverage: 

  • You can get health coverage through an employer. While you pay some premium from your paycheck, the employer will pay most of the premium. 
  • You can buy health coverage from the individual health insurance market. 
  • You can get subsidized coverage based on a state or federal exchange from the Affordable Care Act. Obamacare is still available.

Whether you are an entrepreneur or just employed by a business, this is definitely something to check into if you haven’t already. 

Related: No Health Insurance in 2020? How to Get by…

Homeowners or Renter’s Insurance 

If you own your home, you may want to cover it with a homeowners’ policy. A renter’s policy may not be necessary if you don’t own valuable property. However, it’s worth getting if you do have things that you can’t easily replace if damaged or stolen. 

Both types of insurance policies have liability and property coverage. 

If someone gets injured while on your property, liability insurance will pay for your legal defense if they decide to sue you. It will also pay for any damages that the court awards to the injured person. For instance, somebody could sue you if they trip or fall in your home and break a bone or if your dog bites them. 

Property insurance will pay for the cost of damage to your home or the cost of damage or theft of possessions in your home. For instance, a fire or flood or could damage your property or a visitor or burglar could steal it.  

Since home insurance costs vary, it’s always a good idea to shop for less expensive home insurance for the same coverage if you suspect that you are paying too much. 

Get Insured Today: In Conclusion

Of course, these three types of coverages are only the bare minimum. You may need other types of coverage as well. 

  • If you own a car, you will need an auto policy;
  • if you run your own business, you may need general liability insurance; or
  • if you are in a profession, you may need professional liability coverage.

Make sure you get the right coverage for you. You may even be able to get all your coverage needs with one company, so be sure to check. It could help you save hundreds. The choice may pay off in the long-run.

Are you properly insured?

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AUTHOR LaTia Longuemire

My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.

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