Life is full of risks. Every time you leave home, you’re taking plenty of risks, and some of them can be quite costly. Fortunately, there are insurance policies that can help you mitigate some of the damage negative life events can cause. Here are four types of insurance that everyone should have.
1. Life Insurance
Life insurance does not usually benefit the people who buy it. They’ll be dead before it pays off, but it can really help out those who are left behind. Anyone who has family members who depend on them for income should take out a life insurance policy. These policies pay out when the insured dies, and the face amount of the policy will go to his or her beneficiaries. A life insurance policy could replace several years of income and pay for burial and other final expenses.
Whole Life
There are two major forms of life insurance. The traditional option is known as whole life. This type of insurance has a flat monthly premium for as long as the insured pays. The premium never goes up, but it is usually higher than the other option. Whole life policies can also build cash value over time. Policyholders can usually access this cash value or they can let it grow for decades until they die. Then it will go to their beneficiaries.
Term Life
The other option for life insurance is term life. You can buy more insurance with a term policy. However, the premium is only set for the specified term. These terms can range up to 30 years. The longer the term, the more the premium is likely to be. The cost of a term policy will likely be a fraction of the cost of whole life. Therefore, you can buy more protection for your family. One consideration to remember when dealing with a term policy is the fact that it does not build cash value. What the face of the policy states is what your beneficiaries will get.
2. Car Insurance
Car insurance is a necessity for everyone who owns a car. If you don’t, you can skip this section, but most people in the US will need vehicle insurance. It’s possible to carry only liability coverage once a car loan is paid off, but you may want to keep full coverage if your vehicle has much value because you’ll have to replace it should it become a total loss in an accident. Car insurance protects you from the liabilities you might incur from an accident that’s deemed your fault. There is protection against damage to your car with full coverage. There is always protection against damage to another driver’s vehicle or health with either full or liability coverage. Vehicle insurance is a necessity for anyone who drives.
3. Homeowners or Rental Insurance
If you live on your own, you’ll want to buy either homeowners or renters insurance. The type of policy you will want to get will depend upon your current living arrangements. If you’re buying a house on a mortgage, your lender will likely require you to carry a homeowners policy. This will cover the cost to rebuild your home to its current standard, the cost to replace your personal property like clothes and furniture and any costs related to your having to relocate while your old house gets rebuilt. There are also other riders you can pay for to get even more risk protection. If you’re a renter, you can get off easier on the premiums. You’ll only need a renters policy that will protect your possessions against loss under the circumstances stated in the policy. Regardless, you should pay to protect your stuff.
4. Health Insurance
No one knows where the health insurance industry will go in the future. The topic is a bit of a political football. As it stands now, you need a policy. No one knows when he or she’ll get sick, but it can lead to very high medical bills. Medical bills are one of the leading causes of bankruptcy in the US. Whether you get an individual policy, a group policy through work or Medicaid, you need health insurance. Just make sure to see which deductible and copay options will work for your situation before making your choice.
No one wants to need insurance, but pretty much everyone will file a claim at some point. By having these four insurance policies, you’ll be able to mitigate some of the major risks that are a normal part of life. Both you and your family should be able to sleep a bit better as a result.
