8 Essential and Optional Types of Insurance

In the busy world of today, we often forget that life is unpredictable.  Living has and always will be a challenge. But what happens once you are not there to care for your loved ones?

That’s where insurance comes in. There are different types of insurance, but most of those are a huge waste of finances. Therefore, it is very important to know about all the types of insurance and then decide which ones are essential for your protection and peace of mind.

So let’s discuss the types of insurance you should have and the ones you don’t really need.

4 Types of Insurance You Need

Let’s dive in and chat about the types of insurance that every single person should have so that in times of a crisis, at least you’re secure financially.

1- Health Insurance

What is life without health? Did you know that heart disease is the leading cause of death in the U.S?

If you want to invest in just one insurance, it should be health insurance. Most of the companies offer health insurance to their employees as well as their families.

But if your company does not offer health insurance, you should explore all insurance options and consult a financial advisor. Health insurance can be expensive, but it’s definitely worth your money in the long run.

2- Life Insurance

If you are married or have children, you should definitely invest in life insurance.

It’s important to think about the future and provide your family with a financial cushion in case of your unexpected demise. The younger you are, the less you have to pay for life insurance.

There are different options when it comes to life insurance. Permanent life insurance is a bit expensive but is more secure in the long run whereas term life insurance is less expensive but doesn’t offer lifetime security.

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3- Property Insurance

Building a house can be extremely expensive. When you invest such a large amount of money, it is necessary to protect that investment too. However, this does not mean that only homeowners should invest in property insurance.

There are different types of property insurance according to your specific needs. If you rent an apartment, renters insurance is necessary too.

In the world of today, houses are filled with expensive tech and electronics. It’s important to insure your belongings so that in case of a burglary or natural disaster, your expensive possessions are one less thing to worry about.

4- Auto Insurance

Like houses, cars are expensive investments and it is important to have some kind of insurance in place if something goes wrong.

According to automobile insurance experts, the average driver will be in three to four accidents in a lifetime. Not all accidents are fatal, but even a minor accident can destroy your car and ruin your investment.

There are different types of auto insurance but most states require basic auto insurance by law. Again, it’s important to explore all automobile insurance options and select the one that suits your needs and your budget nicely.

4 Types of Insurance Maybe You Don’t Need

Now let’s discuss some inessential and unnecessary insurance that you don’t need. Having said that, every individual has different needs so it’s important to make your own choice on whether you need particular insurance or not.

1- Travel Insurance

Who doesn’t love traveling? I know I do. Travel insurance can be great if you are a frequent traveler. But if you don’t travel that often and have limited finances, this might not be the type of insurance you need.

Sure, it has a lot of benefits if you love traveling around the world. So, if you are fond of traveling and have some extra cash on hand, go for it.

But if you have a tight budget and can only squeeze in for the necessary ones, I’d leave this insurance out.

2- Credit Card Insurance

Credit card insurance pays your credit card bill in case you are unable to pay it yourself. This insurance is a huge waste of money.

If you can avoid the temptation of getting a credit card in the first place, kudos to you. But if it’s something you really need, you still don’t need the insurance.

Most people hold multiple credit cards. Instead of getting a credit card insurance for all the cards, you can instead purchase life insurance that provides more coverage for a little more money.

3- Disease Insurance

Like people, insurance can be deceiving too. A few health insurance companies don’t cover the cost of specific diseases.

Separate insurance is available for diseases that have expensive treatments such as cancer. Instead of purchasing disease insurance, it’s much better to invest in good and reliable health insurance.

Good health insurance may cost more, but it covers the medical and hospital bills for all the diseases instead of a targeted few.

However, if you think you have a family history of cancer or heart disease and you don’t have enough money for good health insurance, disease insurance is worth discussing with your financial advisor.

4- Unemployment Insurance

The basic unemployment insurance pays your bills if you lose your job. But do you really need this insurance? Probably not.

Instead of paying monthly for this insurance, you can create a savings account that you can use in case of an emergency.

You can probably live without this insurance if you follow the advice of Jack Geller from Friends and put 10% of your salary in a savings account.

Conclusion:

Selecting the type of insurance you need is only half the battle. Before you invest in any insurance, it is important to consider all your options and pick the one most compatible with your current lifestyle and finances.

Although insurance is expensive and sometimes a little difficult to afford, it is a necessity.

So if you don’t currently have any insurance, or are missing out on some of the important ones, consult with your financial adviser and discuss all the types of insurance and the ones you need for a secure future.

Urwah Zahid is an animal lover, food enthusiast, day dreamer and a passionate writer. She has done her Bachelor’s degree in Public Policy and Administration.

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