Medical, legal, auto, travel, life, homeowners – selecting insurance can sometimes seem a daunting prospect with far too much choice. There seems to be an insurance for any eventuality.
But what do they all mean? How many are truly relevant to or required in your everyday life? And just how do you go about untangling the jumbled confusion of the world of insurance?
Here, we have done the hard work for you, and we’ll present you with a comprehensive guide to the different types of insurance to help you decide which products are best for you.
They say you can’t put a price on your health, but securing good health insurance is certainly a good place to start. Health is fundamental to all of your other priorities in life, allowing you to enjoy your work, family, and hobbies.
Perhaps most importantly, comprehensive health care allows you to protect these things when you need them the most but are unable enjoy them: on the (hopefully rare) occasions where your health fails or you suffer an accident. Being unable to work can put a massive strain on finances and family, not to mention resulting in extortionate bills to fund medical treatment, tests, and surgeries.
Who needs it?
Health insurance is an absolute must for everyone, regardless of your age, sex, income, marital status or any other factor. As a plus, it is also likely to be more accessible than you may initially realize.
Many employers will offer plans for both full and part-time workers, and these are often the cheapest and most affordable choice. There is an added bonus if you are part of a married couple; often both parties can be covered by one spouse’s policy, and there may be discounts or deals on offer.
Not only is having insurance an excellent idea in order to protect you financially as a driver, but it is also the law in many states. Cars are expensive and are often one of the largest investments many of us will make outside of property. It makes sense, therefore, to secure a solid auto insurance policy to cover you in the event of any accident or other incident.
In addition to helping to recover the cost of the car itself, most modern car insurance policies will contain optional extras which can also be very beneficial in the event of an accident. Features such as legal cost cover in the event of death or injury to passengers, medical treatment, and the cost of a rental or courtesy car if yours is written off can all save you from huge bills if something goes wrong.
Who needs it?
Most states require any driver to take out a car insurance policy. It is also a requirement of most loans if you are purchasing your vehicle as part of a credit agreement. Overall, all responsible drivers and car owners should make it their responsibility to take out a comprehensive car insurance policy. A small investment now could save you thousands down the line.
It is an unpleasant thought, but the only guarantees in life are death and taxes. You may feel that life insurance will be of no advantage to you – after all, you won’t be here to see the benefits – but this is a type of insurance which has advantages for your loved ones left behind.
A good policy can not only cover funeral and burial costs after death, but can also provide an income for your family after you are gone. Death is an expensive business, and a good insurance plan provides you with peace of mind that the ones you love will be secure without having to worry about expenses. Even if you are currently single, life insurance can cover expenses and eliminate any debts you may have accrued.
As well as being beneficial after death, a good policy may also profit you in life; many plans are long term, and some of the life insurance companies let a policy be used as collateral for a loan or as a long-term investment for the growth of your finances.
Who needs it?
Arguably, everyone would benefit from a solid life insurance plan. However, this is particularly important for those with families and particularly for those with children or dependents.
Like auto insurance, this is usually a legal requirement if you have a mortgage in some states. This is based on the idea that the property you purchase technically belongs to the bank, and you are borrowing the money until all of the payments are met. As a result, the owner (the bank) requires that its asset and investment is adequately insured.
One bonus is that you may not have to worry about a separate policy, since many mortgage providers will incorporate this payment into your total amount, ensuring that you only have to pay one sum. With a property often being the largest investment many of us will make in our lifetime – certainly financially – it makes sense to protect that asset as much as you can.
Good homeowners insurance will cover you in the event of disasters such as fire or flood, adverse weather, damage to the property, damage to the home or assets, and liability against accidents which occur in or around the property. It is important to check the terms of your policy properly; some are more thorough and comprehensive than others.
Who needs it?
Homeowners insurance is a legal requirement for anyone who has a mortgage. Even if you own your home outright, it is probably necessary if you cannot afford to purchase another home outright.
If you have a disability which prevents you from working, disability benefits could help you to cover some of the income lost. There are two main types: short term, where the benefits remain in place for a maximum of two years, and long-term, where the benefits may continue for the rest of your life.
It may be worth checking with your employer; some offer a range of disability insurance. If this is not the case, private policies are available, though rates may be higher.
Who needs it?
Anyone who would be financially hurt should they be unable to work due to illness or an accident should make sure they have coverage.
Other Kinds of Insurance
As well as the main types of insurance listed above, there are a number of other varieties which you could benefit from.
Long-term care insurance is a plan which covers costs in the event that you require long-term care or assistance later in life.
This care is usually excluded from health insurance policies, Medicare, and Medicaid, so it is worth taking the time to make sure you are covered. If you require long-term residential care, this policy can cover the costs.
Medicare is a government health insurance plan available to those aged 65 or over, or younger people with disabilities. It covers all aspects of basic healthcare and is a popular option if you are unable to afford a private policy.
Most Medicare recipients also choose to purchase a Medicare supplement plan to fill the gaps left by their medicare coverage.
An absolute must for business owners, business insurance protects you financially against a range of issues which can negatively impact the company, such as damage to property, liability, compensation claims, professional errors, and many others. A small investment could save you money down the line and maybe even help you keep your business afloat.
Make your furry friend a priority, and protect yourself from incurring expensive vet bills if something goes wrong. Good pet insurance will be tailored to your pet’s needs and can offer both peace of mind and practical financial help in a worst-case scenario.
This is as crucial for renters as homeowners insurance is for mortgage payers. You may not own the property, but renters insurance can cover all of your belongings inside, which can add up to a significant sum.
In addition, purchasing renters insurance early on can actually reduce your premiums if you later go on to buy; many insurers will offer those with a claim-free history a hefty discount.
Travel insurance is as essential as sunscreen when traveling abroad. The last thing you want is to end your holiday with a significant medical bill.
Travel insurance can also cover you for lost or delayed luggage, stolen belongings, cancellation, and even natural disasters, so it is well worth researching the best policy.
For total peace of mind, it may be worth taking out an umbrella, or extra liability insurance, policy protecting you from lawsuits and major claims, as well as helping to protect major assets such as your home or car. Umbrella insurance is able to go further than standard home or auto insurance, providing you with extra coverage and peace of mind.
Whatever your situation, it is always worth taking the time to research the best insurance policy for you. Not only is it often a legal requirement, but it can also help to provide you with valuable peace of mind. A small investment now could help to prevent a much bigger bill in the future.