Auto, health and home insurance are usually the only types of insurance that many people have. However, in order to adequately protect yourself and your future income, there are several other types of insurance that you may want to seriously consider and I'm going to talk about some of them in this blog post.
Having the right insurance can potentially save you a ton of money in the event of an emergency or unplanned life occurrence. It means you can protect yourself without having to impact your money plan. On the flip side, not having adequate insurance can derail your financial goals and you definitely don't want that.
"Not having adequate insurance can derail your financial goals."
One thing to keep in mind before signing up for additional insurance coverage and adding new premium payments to your budget is to make sure the coverage makes sense for your current life situation and the additional monthly costs are justifiable. You don't want to be making monthly payments for insurance coverage if you don't necessarily have a need for it.
Below are 5 insurance policies for you to seriously consider other than health, auto & home:
1. Life Insurance
Life insurance is something to consider if you have other people who depend on you, for instance, a spouse or children, and you have large financial commitments such as a mortgage, child care expenses or any major debt. The purpose of life insurance to provide a lump sum payment to your dependents in the event of your death. How much life insurance you buy depends on the number of years of income you want to cover.
There are different types of life insurance for example -
- Term life insurance:
This is where you pay an annual premium and in the event of your death, your beneficiaries get paid a lump sum.
- Cash value insurance (e.g. Universal, whole, etc):
Which is basically a combination of your standard life insurance and some sort of savings account or feature associated to it so over time you may get money credited to you. While this type of life insurance sounds attractive it is also more expensive so you'll want to keep that in mind.
Regardless of what type of life insurance you choose, you want to make sure you fully understand what is associated with each, how much coverage the premium provides and if there are any conditions or requirements.
2. Long Term Disability Insurance
This insurance covers you by replacing your income in the event that you are unable to work due to a permanent or temporary disability. Regardless of whether you have dependents or not, if you have monthly living expenses then you definitely want to look into getting disability insurance.
What about short-term disability insurance? Well if you have a fully funded emergency fund (6-12 months) then it should cover you, however, adding on short-term disability (depending on the cost) might not be a bad idea.
3. Renters Insurance
If you are renting your home, you are not responsible for the actual building or for major repairs, but you may want to consider getting renters insurance to cover your valuables within your home in the event that they ever get damaged by flooding, fire or other type of disasters or in the event that your home is broken into. Things like your electronics and other valuables are the things that your renters insurance would cover.
4. Personal Article Insurance
Got an expensive engagement ring or wedding ring set? An expensive watch? A laptop you take with you everywhere? The costs of replacing items like this can be really expensive, so if you have any personal items that are of value that you often have with you outside of your home, you should definitely consider insuring them through a personal articles policy to make sure that in the event they get lost or stolen, you can replace them without having to break the bank.
5. Pet Insurance
This can be useful and save you a lot of money if your pet will potentially need major surgery or will have expensive medical care. A lot of times when people get pets, they don't always consider the medical costs that could be associated with owning a pet. One thing to keep in mind is that as your pet gets older, the more medical attention they might need, so pet insurance is definitely something to consider.
Like I mentioned earlier, you want to make sure that whatever additional insurance coverage you get makes sense for your life situation and that monthly cost of coverage fits into your budget. You also want to make sure that the potential payout from an insurance policies far outweighs the cost you'll be paying to have the coverage over time.