Types of Insurance

Aside from the times that state or federal laws require you to have insurance, you have the freedom to decide what kind and how much insurance to buy.

At no extra cost to you, some or all of the products featured below are from partners who may compensate us for your click. It's how we make money. This does not influence our recommendations or editorial integrity, but it does help us keep the site running.

Let’s be clear: If your house burns down or your health falls apart, insurance won’t make everything better.

Insurance simply can’t protect you from the unpredictable nature of life.

But insurance can and should help you build a new life if tragedy strikes. Insurance can protect you from losing everything.

You can insure anything from your smartphone to your pet’s teeth, but that doesn’t mean you should.

Instead, let’s start with the coverages you most likely need.

It can insulate you from unexpected expenses.

9 Types of Insurance You Need To Consider

Here are 9 of the most popular types of insurance policies to consider:

1. Auto Insurance

Auto insurance policies consists of these coverages:

If you have a car, your state most likely requires you to buy liability insurance coverage. (New Hampshire still doesn’t.)

If you owe money on your car, your lender will require you to protect the car with comprehensive, and collision coverage.

It’s easy to find coverage online. Be sure to check customer reviews and, more importantly, grades from independent insurance ratings agencies that analyze the financial health of auto insurance companies

Other coverages similar to auto insurance include:

2. Disability Insurance

The Social Security Administration says 1 in 4 millennials will miss extended periods of work at some point in their careers because of an injury or a serious illness.

If you got sick or injured and couldn’t work, disability insurance coverage could replace 50% – 60% of your income so you could keep paying the bills.

There are two primary types of disability insurance:

Both usually cost about the same amount in premiums — about 1 to 3 percent of your annual salary — but you get a lot more potential return from a long-term disability policy.

Rather than buying a short-term disability policy, you could simply save and keep three months worth of income in an emergency fund.

3. Health Insurance

Health insurance has always been a good idea; however, since Congress passed the Affordable Care Act in 2010, health coverage has also been required by federal law.

You can get coverage for yourself and your family. Kids can now stay on their parents’ health insurance plans up to age 26.

With health insurance policies, you’ll pay:

Typically, the more you pay in premiums, the less you’ll need to pay in deductibles and copayments.

Here’s what you get:

You can buy health insurance from the following:

You may also find dental and vision insurance through these same channels.

4. Homeowners Insurance

Laws may not require you to buy a homeowners insurance policy, but your mortgage company probably does.

And, since your home is probably your biggest investment, you’d want solid coverage anyway.

Here’s what you have to pay with home insurance:

Here’s what you get:

5. Life Insurance

If someone, like your spouse, your children, your grandchildren, your aging parents — depend on you financially, you probably need life insurance.

If you died with a life insurance policy in force, your family could claim your policy’s death benefit. They could use the money to pay off the house, to save for college, or to continue paying bills without your income.

Many life insurance companies offer life coverage online, but you may benefit from some guidance from an independent life insurance agency.

Continue Reading:

6. Pet Insurance

Health care for your pets costs a lot. Whether you’re going in for regular checkups and vaccines or because your pet needs emergency surgery, the vet’s bill will be hundreds if not thousands of dollars.

Pet insurance can reimburse you for some of these costs. Policies typically come in three varieties:

Of these types, accident care has the most potential to help with unexpected expenses. Accident-only plans can typically start around $6 per month.

Wellness visits tend to cost the same from year to year which means you could plan for this expense without needing insurance.

Be sure to check out your policy’s spending caps and find out whether the caps apply to the year, the accident, or the lifetime of your pet.

With most pet insurance policies, you pay the vet out of pocket and then file for reimbursement from your insurer.

7. Renters Insurance

Renters insurance works in a similar way to homeowners, but it doesn’t cover the structure of your apartment. Your landlord should have insurance for that purpose.

Your landlord’s insurance; however, will not cover accidents that happen in you home or your personal belongings if they’re damaged or destroyed because of a natural disaster, fire, or break-in. You need your own renter’s insurance policy to provide this protection.

Like auto coverage, you can buy homeowners or renters insurance online, or you can work with an independent agent.

You can save money on premiums buying a policy with higher deductibles. In exchange, you’d have to pay more out of pocket before your coverage kicks in. Some of the best companies have plans starting around $5 per month.

8. Small Business Insurance

A small business can become the engine driving your financial dreams.

Business insurance should help you avoid a variety of obstacles that could derail your plans. These coverages can help most businesses protect themselves from unexpected costs.

9. Travel Insurance

If you’re planning a long, global trip, it makes sense to protect the money you’ve spent planning the trip with a travel insurance policy.

Travel insurance can help with:

You probably won’t need travel insurance for shorter trips within the country. You also need to check if coverage will protect you from cancellations due to COVID-19 coronavirus.

It’s up to you, as the traveler, to decide.

What Types of Insurance Coverage Do You Need?

Aside from the times that state or federal laws require you to have insurance, you have the freedom to decide what kind and how much insurance to buy.

Before deciding, take a few minutes to imagine the worst: a house fire, an untimely death, a collision on the highway, a serious illness, or an injury that prevents you from working.

Insurance can’t fix these tragedies. But it can and should provide the tools you’d need — or the tools your surviving family members would need — to start rebuilding a new life.

Read 1 comment or add your own

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Name *

Email *

Comment *

Read Comments

Most of what's published and shared about money is either wrong or so old school that it's obsolete.

The challenge isn't how to make more money, it's how to make and use money to live a life you love, with time and space for yourself.

And that's the heart of Millennial Money: stop hustling yourself into a breakdown and stop wasting time by managing money poorly.

Let's stop the grind, together.

Get free access to Grant's best tips along with exclusive videos, podcasts, courses and way more.

Advertiser Disclosure

This website is an independent, advertising-supported comparison service. We want to help you make personal finance decisions with confidence by providing you with free interactive tools, helpful data points, and by publishing original and objective content.

We work hard to share thorough research and our honest experience with products and brands. Of course, personal finance is personal so one person’s experience may differ from someone else’s, and estimates based on past performance do not guarantee future results. As such, our advice may not apply directly to your individual situation. We are not financial advisors and we recommend you consult with a financial professional before making any serious financial decisions.

How We Make Money

We make money from affiliate relationships with companies that we personally believe in. This means that, at no additional cost to you, we may get paid when you click on a link.

This compensation may impact how and where products appear on this site (including, for example, the order in which they appear), but does not influence our editorial integrity. We do not sell specific rankings on any of our “best of” posts or take money in exchange for a positive review.

At the end of the day, our readers come first and your trust is very important to us. We will always share our sincere opinions, and we are selective when choosing which companies to partner with.

The revenue these partnerships generate gives us the opportunity to pay our great team of writers for their work, as well as continue to improve the website and its content.

Editorial Disclosure

Opinions expressed in our articles are solely those of the writer. The information regarding any product was independently collected and was not provided nor reviewed by the company or issuer. The rates, terms and fees presented are accurate at the time of publication, but these change often. We recommend verifying with the source to confirm the most up to date information.

Learn more in our full disclaimer

©2024 MMG Media Group, LLC. All rights reserved.