Insurance Policies that You Actually Need

There are a host of insurance policies that you do not need. From credit protection insurance to mortgage life insurance, there are a number of ways for you to needlessly spend money for coverage you probably already have with a necessary insurance policy. Just so you know what you do need, here are four types of insurance that just about everyone should have:

1. Life insurance. This is insurance that protects your loved ones when you pass on. This is a must — especially if you have dependents and/or obligations. Whether you get term, whole or universal is up to you. Term insurance is generally the cheapest, while whole and universal life cost more, but build up cash value.
2. Health insurance. Unfortunately, this is costly. However, it is a necessity. You should be prepared for expensive health-related procedures, and health insurance can help make costs manageable. You can usually get health insurance through your employer, or through organizations that help the self-employed find health insurance. Also, you can check with your state for subsidized programs for families or children. Your children, at the very least, should have coverage.
3. Auto insurance. If you don’t have a car, this is obviously superfluous. But if you have a car, most states require that you drive insured. If you have a loan, your lender will probably require that you have comprehensive coverage.
4. Property insurance. This is insurance that covers your property. You get this type of policy in the form of a homeowners or renters policy. Make sure you check the policy carefully, however: Many policies require that you pay extra to add things like fire and flood protection.

Also, depending on your job and your income, it is sometimes wise to pay for disability insurance coverage, just in case you become incapacitated and need help making up for lost income due to your inability to work.

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