Insurance is one of those ugly but necessary things we all need. It's ugly because it can be such a pain to deal with. Co-pays, deductibles, staying in-network, comparing rates ... the list of insurance tasks seems to go on and on. However, if another driver hits your car or you have a medical emergency, insurance saves you from a lot of time and trouble. The purpose of insurance is to transfer the risk. None of us wants a disability or identity theft, but if it happens, we are more than happy we have insurance to cover us.
There are seven types of insurance that are absolutely necessary to have. Beyond these seven insurance categories, don't worry about anything else. All the other types of insurance you hear or read about are just scams to get your hard-earned cash.
- Homeowner's/Renter's Insurance
In case something happens to your possessions, this insurance will cover your material belongings. If you have homeowner's insurance, be sure that you have guaranteed replacement cost.
- Auto Insurance
Never drive around uninsured! The key to auto insurance is to make sure you are signed up for adequate liability coverage. If you drive an older vehicle, crunch the numbers to see if it makes sense to drop your collision.
- Health Insurance
Never, ever go without health insurance—that's just asking for trouble! Check out the various options that are available to determine which one fits best for you and your family. Don't forget to check out options that offer a Health Savings Account (HSA).
- Disability Insurance
Many companies offer great rates on disability insurance to their employees. Make sure 65% of your current income is covered and try to buy insurance that pays if you can't perform the job you are equipped to do.
- Long-Term Care Insurance
It may not be a priority for you right now, but 69% of people over the age of 65 will need long-term care at some point in their lives. Maybe it's not time for you to get this insurance, but do your parents need it?
- Identity Theft Protection
With identity theft on the rise, it's a smart move to protect yourself with the right insurance. Make sure your insurance includes restoration services that assign a qualified counselor to clean up the mess.
- Life Insurance
You need life insurance. Don't do anything else until you and your family are covered! Never, ever get whole life insurance—that's just throwing your money down the drain. Always go with term life insurance. Dave recommends Zander Insurance for all of your term life insurance needs.