5 types of insurance the average family needs
Most people don’t like spending money on insurance, but it’s one of those things that is best not to get caught. Everyone hopes they don’t need it, but if they do, it can save them paying thousands of dollars out of pocket.
These days, there are policies for just about everything from pets to weddings. But there are only a few types of insurance that everyone should consider. Here are five that the typical family doesn’t want to be without.
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1. Health insurance
Medical bills can get expensive in a hurry. Even a single emergency room visit can cost $ 1,000 or more. Health insurance isn’t perfect – it has often high copayments, premiums, and deductibles – but it can still help families meet the costs of their medical treatment.
People who are not eligible for insurance in the course of their work can purchase health insurance through an online marketplace. Typically, people have to wait until the annual open enrollment period to purchase or change a health insurance plan. The open enrollment period for 2022 is from November 1, 2021 to January 15, 2022. But those who miss this window may still be able to obtain coverage if they are eligible for a special enrollment period due to the birth or death of a family member. , a change of job or the loss of existing insurance.
2. Auto insurance
Auto insurance is a legal requirement for drivers in almost all states. The exact amount required varies by state, but $ 25,000 of personal injury liability coverage per person and $ 50,000 per accident is a common requirement. Many states also require drivers to have at least $ 25,000 of liability coverage for property damage.
Drivers must have at least minimum state auto insurance if they plan to get behind the wheel, even if they don’t own a vehicle. Drivers who own a car may want to invest in additional protections like collisions and comprehensive coverage to protect their cars.
It is often a good idea to purchase more than the state’s minimum coverage. This increases monthly premiums, but reduces the risk of huge personal expenses if a driver causes an accident that insurance cannot fully cover.
3. Home or tenant insurance
Home insurance is generally a requirement for homeowners who have mortgages on their home. It is a smart investment although it is not necessary because houses are expensive. It would be difficult for most people to pay out of pocket for a new home if their existing home were destroyed in a fire or natural disaster.
Those who rent should consider tenant insurance instead. These policies are generally more affordable than home insurance policies because they do not include coverage for the property itself. It is the owner’s responsibility. But they do offer liability coverage and protection for a tenant’s personal property.
4. Life insurance
Life insurance protects a family’s finances after the death of the policyholder. There are several types of life insurance, but term life insurance is the most common and the most affordable.
These policies have a duration – often between 10 and 30 years. The policyholder pays monthly premiums, which vary according to age and state of health, and if this person dies during the term of the policy, the insurer pays the amount of the benefit to the beneficiaries listed. .
There is also whole life insurance and universal life insurance which provides lifetime protection for the policy holder, but these policies are more expensive and not suitable for everyone.
5. Long-term disability insurance
If a worker becomes disabled, they will not be able to rely on a paycheck and may not be able to cash a life insurance policy. This is why long term disability insurance is a good investment.
This helps the policyholder to replace some of the lost income if he is disabled for an extended period. There is usually a minimum number of days that the person must be unable to work before this policy takes effect.
Some employers offer long term disability insurance as a social benefit, but it is also possible to purchase these policies individually.
This is not an exhaustive list of insurance options available, and some families may want additional policies to feel fully protected. But for those who don’t know how to best protect their family’s finances, the five policies listed above are a good place to start. Shop around and compare quotes to see which companies offer the most affordable rates, and consider bundling policies where possible to save on costs.