You always hear about the importance of insurance: car insurance, health insurance, life insurance, and the list goes on. As a young person, it is hard to decide what kind of protection you need and what is overkill. When you are working on a budget, it is hard to make the decision to invest in insurance when things are going well. You would much rather spend your money on you. But if you are involved in an auto accident or fall ill, you will wish you had not risked avoiding insurance costs.
Insurance Worth Investing In
Insurance can be a nuisance when it is not needed but a lifesaver when it is. Here are six types of insurance policies you should not go without. Visit your local insurance agency and talk to an agent determine what plans fit your lifestyle and budget.
- Auto insurance – If you own a car, it is imperative that you have at least liability insurance. It is not only the law. It could save you thousands of dollars in the case of an accident. There are several options to choose from: liability, collision, and comprehensive insurance. Liability insurance covers any damage to the property or person of the other party in the case that you are responsible for the accident. Collision coverage pays to replace your car if it is damaged or totaled in a wreck. Comprehensive insurance covers loss related to theft, flood, fire, vandalism, or hail.
- Health insurance – If you go uninsured, you leave yourself vulnerable to potential financial ruin. Half of all bankruptcies are due to medical debt. If you don’t go to the doctor often, consider a high-deductible health insurance plan. These plans have lower monthly premiums because you are responsible for more up-front costs.
- Homeowners or Renters Insurance. This type of insurance can help replace personal property lost or damaged in a fire or theft. They are both founded on liability and personal property coverage. There are some differences in the two types of insurance that are important to understand, if you are changing circumstances from one to the other. Homeowners insurance covers the building and possibly other dwellings on the property. Renters insurance does not. Because of this, homeowners insurance comes at a higher price. Make sure to check with your agent to see what your policy covers and what it doesn’t.
- Umbrella policy. This is an extension of homeowners and auto insurance. It adds an extra layer of protection. If your assets exceed the limits of your other insurances. If you are found to be at fault for a multi-car collision, the costs could quickly exceed your coverage. This could be devastating.
- Long-term Disability Insurance – If you are unable to work for long periods of time due to injury or illness, this type of insurance covers your loss of income. This insurance is more important than you might initially think. The Social Security Administration estimates that over one in four people 20 years of age today will be disabled before the age of 67. A permanent injury, especially at an early age, could really derail life plans.
- Long-term Care – This type of insurance isn’t as necessary if you are young. It is important that you obtain coverage by the time you are 60 in order to protect your retirement savings from the expenses associated with long-term care. Take into consideration your health and family history when making a decision as to when to buy long-term care insurance.
Insurance can be a tricky business. Although it can seem overwhelming, it is a necessary expense that can really save you in your time of need. Talk to an insurance agent you trust. They can clarify any gray areas. Ask lots of questions. They are there to help.