Which Types of Insurance Do I Need?

Financial Planning

Life is unpredictable. Make sure you’re prepared for any situation with these insurance policies.

This post is sponsored by Responsival.

One of the only guarantees in life is that we never know what is coming next. While we hesitate to anticipate financial losses, it is important to plan for the “just in case.” If you haven’t previously explored getting insured, then we highly recommend you keep reading so you can get started exploring different policy options. In this article we’ll be discussing 5 major types of insurance that you need to prepare for whatever the future brings:

  1. Life insurance
  2. Long-term disability insurance
  3. Health insurance
  4. Auto insurance
  5. Homeowner’s Insurance

Let’s find out how these different insurance policies can help you gain peace of mind and why they are universally important to protecting your financial future!

  1. Life Insurance

If you haven’t already explored life insurance options, now is the time to search for a whole or term life insurance quote

Protect your children and loved ones by purchasing a life insurance policy.

Life insurance is designed to protect your loved ones in the event of your sudden passing. Though this is not the most uplifting topic, it is one that is important to consider when it comes to planning your financial future. For most people, life insurance is needed when you have a dependent—or someone who relies on your income. However, life insurance is also important for anyone who has outstanding debts like student loans. If you have outstanding debts, then in the event of your passing, your debts will be transferred to your surviving family members. In order to prevent this from happening, you will need a life insurance policy.

There are two main types of life insurance available—whole life insurance and term life insurance policies. The type of life insurance you purchase will be determined by a number of personal factors including your health, age, and budget.

In general, term life insurance is the more popular option—especially for younger people due to its cost. Term life insurance costs far less than whole life insurance and will provide the same amount of coverage. The catch is that once the term expires, your life insurance coverage ends. Most people will purchase a life insurance policy that covers them through major life events, like raising children. Then, once you no longer have any financial dependents, your life insurance will expire.

Whole life insurance—on the other hand—never expires and even accumulates a cash value over time. This cash value can be used during your lifetime for things like medical bills and extended senior care as you age. While whole life insurance has a few advantages over term life insurance, it also costs significantly more each month. For people looking for coverage at the most affordable price, we recommend starting by searching for term life insurance quotes.

It is important to be insured to prevent any potential financial hardship in the event of your passing. To make sure that your family is properly protected, you should take out a policy that covers your current income for 10 years. By multiplying your yearly income by 10, you can get a good starting point for the minimum amount of coverage you need.

In order to get the best price for term life insurance coverage, we recommend shopping around to find a few insurance companies and compare prices. In general, the more term life insurance quotes you compare and the more research you do, the better price you can get.

  1. Long-Term Disability Insurance

Long-term disability insurance covers you in the case of injury or sickness

Disability insurance helps replace income while you recover.

A common theme you may notice throughout these sections is the idea of planning for the future. If you assume that everything will be okay no matter what—even years from now—you could accidentally put yourself and your loved ones in a tough financial situation. Long-term disability insurance is a great example of this. No one wants to imagine having to take extended time off work due to injury or sickness—but it could happen. Should something cause you to take extended leave, you need to be prepared.

Long-term disability insurance is a type of insurance that helps you stay financially secure once short-term disability has run out. In order to access these benefits, you need to take out a long-term disability policy before you become unable to work. When you have long-term disability insurance, your income can be replaced by up to 50%-60%. This type of insurance can be purchased for any job type and covers any type of injury or sickness that prevents you from working. Of course, in order to receive assistance, your medical information is required and will be evaluated by the insurer.

If you need to take a leave of absence for a long-term disability but are uninsured, you could end up putting yourself and your family in a vulnerable financial situation.

  1. Health Insurance

Medical care is exceptionally expensive, which is why it is so important to get insured if you aren’t already

Healthcare costs can quickly get impossibly expensive without insurance.

While life insurance and long-term disability insurance help you stay protected in the future, health insurance is important for both the present and the future. Even something as simple as a checkup or a blood test can be very expensive without any health insurance. In the event of a major medical emergency, the cost of standard care often becomes shockingly high. That’s why getting health insurance is important in order to avoid financial hardship caused by sickness or an accident. In many cases health insurance is offered through your employer, so we highly recommend speaking to your HR department about the kind of coverage that will work best for you. You can also do research on your own by exploring different types of healthcare plans offered by your employer and choosing the one that best suits your needs.

Getting health insurance without coverage from your employer is a bit more complicated, but it is still necessary if you are unemployed or if coverage is not offered through an employer. For example, freelancers and people who are self-employed will still need to get health insurance to avoid getting buried in medical bills. If you are getting insurance outside of traditional employment, there are 3 options to consider—getting insurance through Marketplace, CHIP, or Medicaid. If you are without children and do not have a disability, then Marketplace is probably the best option to get coverage. Through Marketplace, many people who would otherwise go uninsured are able to access an affordable health insurance plan.

  1. Auto Insurance

In the U.S., auto insurance is required to legally drive

Driving without insurance can lead to high costs and even legal implications.

If you drive a car, you will need to get an automobile insurance policy. In most places, car insurance is required by law. If you are driving without insurance and you get into an accident, you will have to bear the cost of your vehicle and any other vehicles involved. Not to mention that getting in an accident without insurance could also lead to a lawsuit.

When you get auto insurance, you can get peace of mind that your vehicle is insured and that you are obeying all relevant laws. Should you get in a car accident, your insurance provider will be able to help cover the costs of repairs for your vehicles and others involved. Without insurance, these costs quickly skyrocket and can leave you drowning in expenses from a single accident. If you are thinking about purchasing a vehicle, it is extremely important to get insured before you start driving. Otherwise, you are putting yourself at risk of both legal and financial consequences.

  1. Homeowners Insurance

Homeowners insurance protects you, your home, and everything inside

Get covered in the case of expensive home repairs.

If you have recently purchased a home, then you should start searching for homeowner’s insurance policies. Homeowners insurance covers the cost to rebuild your home in the event of a disaster. A disaster could constitute anything that causes major damage to your home including severe weather, flooding, fire and more. Since mother nature is so unpredictable, it is important for every homeowner to be insured in the event of a disaster.

When you are searching for a homeowner’s insurance policy, we highly recommend prioritizing coverage for your home’s structure, your home’s contents, and the cost of housing while your home is being repaired.

In order to estimate the cost of rebuilding parts of your home, you should reach out to your local contractor to get an estimate. Once you have your estimate, you can contact the insurance company to file a claim and get reconstruction started.

Without homeowners insurance, the aftermath of an unexpected disaster can be financially devastating. To make sure you aren’t struggling to rebuild after an act of god, you need homeowners insurance.

Being insured is important not only for peace of mind but for planning your financial future. Once you have these 5 types of insurance, you will be well prepared for the future no matter what happens. By securing insurance coverage, you are protecting yourself, your belongings, and your family members all at once. So, don’t put off purchasing these types of insurance—they may come in handy when you least expect it. 

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