Major Types of Insurance You Can’t Do Without

March 23, 2018

 
 

You never know when tragedy might strike which explains why it is important to always be prepared by taking out an insurance policy for a rainy day. By taking an insurance cover you will be able to offer yourself and your property some amount of protection against various risks.

Since there are numerous risks to protect ourselves from, not all insurance policies are the same instead, each insurance policy is designed to protect the insured from a particular type of risk. With so many options available it is understandable why insurance policies confuse most people especially if it’s their first time getting an insurance cover.

Be as it may, insurance experts say it is imperative to have four specific insurance covers. These four insurance policies are:

  • Life insurance
  • Health insurance
  • Auto insurance
  • Long-term disability

Life Insurance

The major reason why an individual should take a life insurance cover, is because it will provide for members of your family that you leave behind when you die. This is extremely important especially if you are the sole breadwinner in your family.

According to industry experts, when taking a life insurance cover, you should ensure that it is about 10 times what you make in a year. This sum would be sufficient to take care of funeral costs as well as offer your family a financial cushion for the tough times ahead.

Health Insurance

A study conducted by Harvard revealed that most families would file for bankruptcy if they suffered a major illness in the family. According to the findings of this study, 62% of all personal bankruptcies in the United States were brought about by health problems. Further research revealed that 78% of all the people who ended up filing for bankruptcy due to health issues had medical insurance.

This explains why you should take health insurance or increase your current one.

Auto Insurance

According to statistics released by the Fatality Analysis Reporting System, over 33,000 people died in car related accidents in 2009 alone. In fact, the leading cause of death for Americans within the 5 – 34 age range is car accidents. The accumulated costs of injuries and deaths that occurred due to the car accidents include $70 billion.

Auto insurance requirements vary from State to State, and not all States require drivers to have auto insurance. However, most States have laws that clearly stipulate who is financially responsible if an accident occurs.

Long-Term Disability

Many people do not give thought to this kind of insurance policy as no one ever anticipates getting disabled. However, according to data from the Social Security Administration, 30% of people joining the workforce will become disabled before reaching the age of retirement.

Long-term disability insurance is very important because even though health insurance covers your hospital bills, it does not cater for your every day expenses not to mention bills that need to be paid at the end of the month. This is where long-term disability insurance comes in.

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