Purchasing protection is a critical part of your financial life. Many insurance products are necessities to prevent a heavy burden should something go wrong. Others are a legal requirement. While some, unfortunately, are only a fit for a select few people and the recommendation to buy them tends to come from commission-focused salesman. Here are a few types of protections you should know about:
- Life insurance: A life insurance policy pays out to the designated beneficiary upon your death. There are many types of life insurance, but the two most commonly discussed are term and whole life. You should consider life insurance if your death would disrupt the financial life of a loved one. Married couples, even with no kids, may want to consider it if one spouse is the primary earner. Single, childless people with co-signed student loans should even consider life insurance if the loan would not be discharged upon death.
- Car insurance: You can’t be driving without auto insurance, so this is an obvious addition to your financial life. Always be sure to shop around for the best price and understand your deductible and what gets covered when you’re in an accident.
- Renter’s insurance: An often overlooked, but important part of a healthy financial life. Renter’s insurance is home owner’s insurance for renters. While often not required by law, although some landlords do stipulate it the need for it in a lease, renter’s insurance protects your belongings and sometimes you in the case of an unexpected event, such as a robbery or someone breaking a bone during a party you hosted.
- Disability insurance: Disability may be one of the most important types of insurance you can get, and one of the most neglected. The Social Security Administration reports that more than 1 in 4 Americans will become disabled before retirement as disability also includes severe illness, cancer and mental illness. Disability insurance will subsidize a portion of your income should you be unable to work for an extended period of time. You can get a short-term or long-term policy. Your employer may offer disability, so be sure to check your benefits first.