We usually can’t prevent the unexpected from happening, but we can get some protection. And that’s precisely what insurance does. It safeguards us financially in case unplanned things happen.
Now, insurance can seem complex, often confusing, and generally not fun to talk about. So, this subject often gets put on the back burner. Yet, like it or not, buying the right policies is the right thing to do to have a healthy financial life, especially if you have a family.
Not everybody needs every type of insurance. In fact, some types of insurance are actually obscure and ridiculous for the average person. For example, while celebrity sommeliers might insure their noses and palates, most of us don’t even have to worry about these types of insurance. Or, anxious fiancées might purchase wedding insurance, and truly paranoid people can plan for the unexpected with less common insurances such as kidnapping and alien abduction insurance. Still, not all of us need or want these types of insurances. But we all need a few types of insurance because the day may just come when we need it, despite we all feel invincible today.
Statistically, all of us are just one serious illness away from bankruptcy, or so says a study published by the American Journal of Public Health in 2019.
The study consisted of a survey including 900 Americans who filed for personal bankruptcy between 2013 and 2016. The results were that nearly two in three bankruptcy situations were caused by medical problems, which led to bills, income loss due to illness, or both reasons.
Now, unfortunately, by the time a health emergency strikes, it’s often too late to get affordable coverage. And, if you want to have a secure way to pay for treatment, you need to be prepared with health insurance. Health insurance reimburses the cost of all or some of your medical bills if you pay for your own healthcare.
Now, many employers offer health insurance benefits. But it’s always best to have your own health insurance to make sure that you don’t depend on your job situation to get financial help in case of a life-threatening illness or injury. Remember that accidents can happen at any time and to anyone.
According to Statista, 54% of Americans own life insurance. This means that over 40% of Americans will leave their families in financial trouble when they pass away. Are you one of them? If your answer is “Yes,” you may want to think twice about how this will affect your family.
Now, the name “life insurance” makes for easier and less morbid marketing because no one wants to plan for the moment they die. However, the reason to buy life insurance is to eliminate the risk that your family would face financial difficulties if you die.
This type of insurance is particularly essential to have if you are the only breadwinner in your household. When you get life insurance, don’t just consider the funeral expenses but also the daily living expenses your family will face after your death. According to a 2018 study, one in three families struggle to meet their day-to-day expenses within a month of the primary or only breadwinner’s death.
The two basic types of life insurance are traditional life and level term life insurance. As the names suggest it, the two differ for the time they cover you.
Can you be so sure that nothing will ever touch your property? Not even a natural disaster, a fire, or a tree branch sent through your roof by a storm? Like it or not, these are things that you can’t control and can have tremendous effects on your property.
Now, most homeowners have homeowners insurance as they have no choice if they have a mortgage (homeowners insurance is required by the terms of the loan). But if you aren’t one of them and don’t have home insurance by now, here’s why you should rethink your decision: home insurance will cover the costs of repairing or rebuilding your home if it will be damaged by events such as storm, floods, fire, or lighting. Plus, most home insurance policies also cover your possessions for loss, in case of a break-in, or damage.
Let us ask you a simple question: if your property would burn down to the ground and you’d lost the roof under your head, would it strap you financially? If the answer is “Yes,” you’d better plan for the unplanned with home insurance.
Disability insurance is one type that most of us think we will never need. However, data from the Social Security Administration shows that three in 10 workers joining the workforce will become disabled and will be unable to work before they reach the average age of retirement. Like it or not, disability is more likely than most of us want to believe or admit.
Now, it’s important to note the difference between disability insurance and health insurance. While health insurance will cover the costs for health care and treatment, disability insurance covers your income in case you become unable to work due to disability. So, even if you have a health insurance policy, you also need a disability insurance policy to make sure you don’t go bankrupt due to job loss because of disability.
Let’s be honest, everybody who owns a car needs auto insurance, especially since it’s required by law to have one. But, even if having auto insurance wouldn’t be required by law, it’s a type of insurance car owners should have to protect themselves in case of an accident financially. Besides auto insurance, if you own a car, you can also buy collision coverage to protect your vehicle in a crash.