The 3 Kinds of Insurance that Everyone Should Have

Nobody wants to go through life expecting the worst. After all, your days would look pretty bleak if you were always waiting for disaster to strike. However, while there’s nothing wrong with being an optimist, it’s important to also be realistic. Bad things sometimes happen, but as long as you take precautions, the fallout doesn’t have to be as bad as you think. And the best way to safeguard yourself against the unexpected? From a financial standpoint, at least, the answer is insurance.

Insurance may not always seem worth your money, especially if you’re a young person who considers yourself relatively low risk. That said, some policies are 100% worth investing in, no matter how old you are. Read on to learn more about three kinds of insurance you should definitely consider getting if you haven’t already.

Health Insurance

What is worth investing in more than your body? Health insurance is big business all over the world, even in the UK, where people have access to free healthcare on the NHS. As British health insurance brokers Healthcare Clarity explain: “Private health insurance is certainly worth it if you want control over when and where you receive medical treatment, something which has become very important to many people as NHS resources become increasingly stretched.” And here in the US, where you have to pay for healthcare, insurance is an absolute must-have.

Adults between ages 19 and 34 have the highest uninsured rate of all US age groups, and while they may be healthier than their elders, that doesn’t mean they’re immune to medical issues. If you aren’t insured and need healthcare, the financial cost could be huge. In a 2019 study by the American Journal of Public Health, out of 900 people who filed for personal bankruptcy, two out of three claimed that medical problems were a contribution. If you can’t get health insurance through your employer, look into buying a private policy.

Life Insurance

Life insurance is another kind of coverage young people don’t tend to think about too much, and why would they? As far as they’re concerned, they still have many years ahead of them, which may explain why only 54% of Americans have life insurance. However, when there are loved ones to consider, there are plenty of reasons to secure a policy.

First of all, your funeral costs would be covered, and a payout would ensure your family is provided for — very important if you’re relied upon to pay bills and other expenses. Life insurance also means that your debts won’t be passed on to your loved ones. For example, if you have a student loan, this is discharged when you die, as long as it’s federal. If it’s a private loan, however, the co-signer will be responsible for subsequent payments. Life insurance means that nobody else will be left with this burden, which can apply to other types of unsecured loans.

When you take out a policy, you can choose between term life insurance (covers a set period of time) or whole life insurance (the remainder of your life). We’d recommend speaking to a financial advisor to clarify all the differences and establish which option is best for your age, occupation, dependents, and other factors.

Homeowners Insurance

Although homeowners insurance isn’t a legal requirement, you shouldn’t take out a mortgage without it. Most lenders will insist that you’re covered until the loan has been paid off, and for a good reason — think about how valuable your home and everything in it is. Remember, insurance doesn’t just cover the building itself, and you can also make a claim if furnishings, electronics, or any other assets are lost, damaged, or stolen.

According to the most recent data from the Insurance Research Council, the average payment per US homeowner claim was $8,787, as reported by ValuePenguin. If that’s money you couldn’t afford to spare, insurance is vital. A policy will also payout for accidents that occur on the property, offering you protection if someone takes legal action against a member of your household for this reason. 

You will also need to bear in mind that ‘acts of war’ and ‘acts of God’ are normally excluded, so make sure you check the policy details before signing on the dotted line. For example, floods and earthquakes aren’t usually covered, but hurricanes and tornadoes may be. If your home is located in an area prone to natural disasters, it’s wise to explore specialist coverage.

Featured Image by Gerd Altmann from Pixabay