Life is unpredictable and things can go south at any time. This is something that’s not within our control. What we can do, however, is get some sort of protection against the lemons that life throws at you and be prepared to make lemonade.
This is where insurance comes in as they are meant to safeguard people from untoward happenings, at least financially. However, the market is full of insurance policies, some of which you have never heard of. The prime examples are alien abductions insurance and ghost insurance. With so many options available, it becomes difficult to determine which insurances you need.
Your specific life situations should determine the right type of insurance. Age, lifestyle, and employment are some of the key factors to take into consideration. It’s also important to pick the right insurance provider that has a good track record and charges a reasonable premium. Check https://insurancereviews.org/ to find out about various insurance providers, benefits offered, and coverage provided.
Once you have considered the factors that determine the need for insurance, the next move is to sort out and determine the type of insurance you need. Most financial experts agree that everyone should have at least four insurances that are listed below.
Table of Contents
Health Insurance
The US is one of the top countries with the highest health care costs in 2021. A recent report revealed that around 50 percent of Americans now carry a medical debt. Another study revealed that medical bills and income loss due to an illness were two of the top three reasons for bankruptcies filed by Americans between 2013 and 2016.
These numbers are shockingly alarming and a wake-up call for getting insurance. But health care insurance is a luxury for many, thanks to the rise in co-payments, dropped coverages, and increased deductibles. The best option would be to take part in the insurance program run by employers, which is cheaper than private health insurance.
Unfortunately, most small businesses do not offer insurance programs. In such a case, it would be wise to inquire about possible health insurance with trade organizations and associations. If even that’s not an option, the only way is to get private health insurance. Bear in mind, health insurance is one of the must-have for any individual
Life Insurance
As per a 2018 study by LIMRA, at least one in three families that lost their sole breadwinner struggle to make ends meet within a month. This is extremely worrisome and if you are also the primary breadwinner in your family, it’s a must to have life insurance in place. The life insurance will not only cover your funeral expenses but also provide for your family after you.
You might have obligations like loans, mortgages, taxes, education for kids, and more, which might fall on your family. This will make life difficult in the absence of a primary source of income. Therefore, while determining the life insurance coverage, consider all of the above factors apart from the funeral expenses.
There are two types of life insurance – whole life and term life. The former serves as an insurance policy as well as an income tool. The whole life insurance policy will cover you until your demise, as long as you continue paying monthly premiums. Term life is self-explanatory and will cover you for a set amount of time. Seek the expertise of a financial professional to decide which of the two is best for you.
Long-Term Disability Insurance
According to a Statista report, the direct cost of the top 10 most disabling injuries in the US stood at $52.93 billion in 2020. There’s a very high probability that one might become disabled at the job before they reach the retirement age. This is why having long-term disability insurance is an absolute must for anyone who works in risky conditions.
This is because even if you have health insurance, it will only pay for the medical bills. However, you’ll still be left with day-to-day expenses that the paycheck usually takes care of and in the absence of an income source, it’s bound to get difficult to make ends meet.
Most employers offer long- as well as short-term disability insurance as part of the benefits. This is the best option for those who cannot afford private disability insurance. If that’s not an option, purchase one of your own and pick a policy that offers income replacement.
Auto Insurance
If the statistics are to be believed, over 38,000 people lose their lives in road accidents in the US every year. Moreover, the direct medical costs involved in road crashes in the US amount to over $380 million. This is an astonishing number of deaths and exorbitant medical costs.
While it’s not important for drivers to have auto insurance in most states, some states do have regulations in place about financial responsibility in case of a crash. Moreover, auto insurances cover medical expenses in case of injuries and also safeguard against any litigation. The insurance also protects your vehicle against vandalism, theft, or damages caused by natural disasters.
These are the most important insurance that every individual must have. It’s best to check with the employer or trade association for available coverage before buying a personal policy. In the end, not having insurance might prove to be more expensive than paying premiums every month.