With the number of options and types available, insurance can be a little tricky. However, choosing the right insurance is critical as it makes a difference to your financial plan and security.
The best thing that insurances can offer you is peace of mind. It assures you that you’re protected against any unexpected events. You may find an insurance policy to cover anything imaginable, but certain types are more essential for your financial plan.
If you’re wondering about the different types of insurance you can consider, below are some of them:
1. Car Insurance
Car insurance comes in a variety of options that may offset the cost of accidents, regardless if you’re at fault or not. Every state has its own minimum insurance requirements. If you own a car, you’re obligated to get the required minimum coverage of your state. Some car owners also opt for extra coverage like SR22 insurance for a traffic accident. To know more about it, check this guide.
Typically, car insurance is made up of various kinds of coverage that kick in for different claims. Several coverage components are required by law, while others are required by the lender if you have a car loan.
For example, collision coverage helps to pay for your damages after a collision with another car or an object, even if you’re at fault. The coverage is normally required by most lenders while you’re still making payments.
2. Health Insurance
This is one of the most essential types of insurance. Besides, health is wealth, right? With good health, you can work, earn money, and enjoy your life to the fullest. However, none of us is immune to diseases and accidents. When these things happen, health insurance helps cover the cost of medical and hospitalization bills.
While the government doesn’t mandate everybody to have health insurance, it isn’t something that you should take for granted. Fortunately, some employers offer health insurance benefits to full-time and part-time employees. However, if you’re self-employed or if your employer doesn’t offer one, you’ll have to explore some insurance options to get covered.
3. Homeowners Insurance
This type of insurance covers your home against theft and damage, as well as some perils like damage to the visitor’s property and other costs if somebody was injured on your property. A homeowners insurance also covers your property’s walls, roof, foundation, and other parts of the structure. If you’re located in a region that is prone to natural disasters, you may need additional insurance that will cover the damages caused by wildfires, flooding, and earthquakes.
4. Disability Insurance
If you can’t work due to an unfortunate injury, disability insurance can reimburse you for lost wages. It can also cover partial, total, temporary or permanent disability. But it doesn’t cover medical care or long-term care services.
5. Life Insurance
Life insurance covers the costs associated with anything related to dying like mortuary and burial fees. It can also help pay off debts, including daily expenses, loans, and mortgages. If you’re a breadwinner, this kind of insurance will surely help your family offset the lost income—even if you’re gone. However, it’s essential to note that life insurance expires. Therefore, you have to renew or get a new policy again to be covered.
Once your life insurance expires and you failed to renew it, your beneficiaries won’t get the proceeds when you meet an untimely death. Moreover, if you make false claims to your insurer and they’ve found out about it, they’ll deny the claims of your beneficiary.
Although all types of insurance are important, not all of them are essential. If possible, purchase only what’s necessary for your needs. For example, you don’t need car insurance if you don’t have a car yet. Similarly, you don’t need to take homeowners’ insurance if you are just leasing and your landlord has already insured the property.
Take note that insurance is meant to protect yourself and your finances, not cause you more headaches. Therefore, you should only take out a policy if you can truly afford the premiums. If you’re confused with the options, always ask for professional help to get a better understanding of what’s crucial for you.