When the pipes burst or you come down with the flu, who’s got your back? Well, the various types of insurances you can buy, of course! Let’s face it. We don’t all have a ton of cash on hand to deal with unexpected emergencies. That’s why you need insurance – to help you get through the tight spots.
In this guide, we’re going to talk about:
- The different types of insurance you can get
- Who can qualify for these insurances
- Whether you really need insurance or if it’s more of a luxury
No matter whether you rent your home, own your car or have never been sick a day in your life, this guide will help you decide which, if any, insurance is right for you.
1. Home insurance
Monthly cost: $-$$
Is it necessary: Yes
Ease of application: Easy
Coverage amount: $$-$$$
Who needs this: Any homeowner or property manager
Sometimes things go wrong. A tree falls through your roof during a hurricane. A flood leaves you swamped. A scurry of squirrels takes up residence in your walls. Things go south and you don’t have the money to pay for the repairs to these things – who do you turn to? Your homeowner’s insurance company!
Home insurance is one of the most necessary insurances for anyone who has equity invested in a house. Whether you’re living in your home or renting it out to others, homeowners’ insurance is a must. In fact, some mortgage lenders require that you have it, so be sure you read the fine print!
Home insurance is generally pretty inexpensive, and if you get good coverage, you might actually be surprised at the benefits. For instance, some homeowners’ insurance may cover food that spoiled in your fridge when the power went out due to a natural disaster.
- Homeowners’ insurance is a must for any homeowner or property manager
- Your coverage is usually pretty good and your premiums will be low
- Some mortgage lenders require that you have this type of insurance, so read the fine print!
2. Renter’s insurance
Monthly cost: $
Is it necessary: Sometimes
Ease of application: Easy
Coverage amount: $$
Who needs this: Anyone renting a home or apartment
Even if you don’t own your home, there are insurances that can protect you if something goes wrong. If your home gets broken into and your property is stolen, renter’s insurance can help. If someone is injured on your property and sues you, renter’s insurance can provide some coverage for you.
While not all rental management companies require that you carry this type of insurance, it’s usually a good idea. Renter’s insurance is super cheap – usually only a few bucks each month – and may be even cheaper if you combine it with your auto insurance.
There are sometimes things that renter’s insurance does not cover. For instance, if your kid throws a baseball through the window, that’s probably going to be on you. But if you have a lot of valuables in your home, or just want the peace of mind, consider renter’s insurance.
- Renter’s insurance can cover you and the stuff inside your apartment or rental home
- It’s not necessary in some cases, but can be a good idea for peace of mind
- Renter’s insurance is very inexpensive, so it’s not going to set you back very much
3. Travel insurance
Monthly cost: $$
Is it necessary: No
Ease of application: Easy
Coverage amount: $$
Who needs this: People with medical concerns, people who may experience cancellations
You do not need travel insurance for every trip you book. There’s about a 99.9% chance your trip will go exactly as planned, you’ll depart on the intended day and you’ll have the adventure of your life on vacation. However, there’s a chance that won’t happen, too.
If you have concerns that your vacation or other trip may be cancelled or jeopardized, you should consider travel insurance one of the most important insurances out there. You’ve invested a lot in your vacation – don’t lose all that money by being unprepared.
You should also definitely get travel insurance if you’re travelling abroad. Political unrest and other factors can cause your vacation or travel to be cut short or cancelled completely – don’t take that risk. People with medical conditions will need to buy travel insurance, as well, as you may be forced to either leave to go home or pay for expensive medical help while away.
Again, you don’t always need travel insurance. But if you’re worried you may lose the money you invested in your trip, this insurance is a good idea.
- You don’t always need travel insurance but there are some instances where it might be necessary
- If you have medical conditions or are travelling abroad, this insurance is a good idea
- Cheap flights and inexpensive trips probably won’t require that you purchase insurance
4. Life insurance
Monthly cost: $$
Is it necessary: Sometimes
Ease of application: Moderate
Coverage amount: $$-$$$$
Who needs this: Those with many assets, with children or with outstanding bills
There are several types of life insurances: whole, universal, term, permanent, variable and so on. We’re not here to talk about that; you can speak with an insurance agent about which one might be right for you. That said, life insurance is important to many kinds of people. You may need life insurance if:
- If you want to ensure that your children, grandchildren or spouse is cared for after your death
- If you still own on your home and want to be sure your partner, spouse or children don’t become financially responsible for it
- If you have an aging parent you’d like to see taken care of after you die
- If you’d simply like to leave something to your family
- If you have a special needs child who will require care his whole life
- If your net worth is high and you want to cover the taxes your loved ones will pay on their inheritance
Again, we’re not agents or brokers, and we can’t decide whether, how much, or which life insurance is right for you. But it’s relatively inexpensive, averaging around $30 per month for a health individual, and it may give you the peace of mind you need to retire restfully.
- Not everyone needs life insurance, but you may feel more comfortable if you have it
- There are all sorts of different types of people who may wish to carry life insurance
- Talk to your broker about the different ways you can purchase insurance and which is best for your lifestyle and financial situation
5. Health insurance
Monthly cost: $-$$
Is it necessary: Sometimes
Ease of application: Moderate
Coverage amount: $$-$$$
Who needs this: Those people who live in countries without universal health care
Not every nation in the world has universal healthcare. In fact, sometimes the cost of health insurance can actually cause people to skip going to the doctor when they’re sick. That’s really unfortunate, and we hope you consider the cost of health insurances as they compare to the value of your health.
Insurance in countries that don’t offer universal coverage will vary, both in the actual coverage and in who can qualify. If you have pre-existing conditions like cancer or diabetes, your insurance is going to cost more. If you’re pregnant or are a senior, you may also find that your premiums (and deductibles) are higher than if you’re a healthy person.
Health insurance is most important for these people. If you have conditions that will require you to make frequent doctors visits or take prescription medication, it may be a good idea to sign up for coverage. If you are otherwise healthy and live in an area with a “minute clinic” or a public health department, you may be able to get away with no insurance.
In some nations, health insurance is mandatory. For instance, in the United States you may be fined if you don’t hold coverage unless you qualify for an exemption. To save on costs, find out if you qualify for public assistance that’s available in your corner of the globe.
- Health insurance is a necessity for those with pre-existing conditions – unfortunately, it’s harder to qualify
- Find out if there’s a free or reduced cost insurance plan in your area
- In some cases you may be able to get by with no health insurance, such as if you live in a place with universal healthcare coverage
6. Auto insurance
Monthly cost: $$
Is it necessary: Yes
Ease of application: Moderate
Coverage amount: $$
Who needs this: Anyone with a driver’s license
You need car insurance. There’s just about no case that we can think of where you would not need car insurance. In fact, most places in the world require that, if you drive, you must carry insurance coverage with certain minimum requirements.
The problem isn’t you – it’s other drivers. It’s deer that jump out in front of your car. It’s pedestrians who don’t look where they’re going. And it’s other people who aren’t insured that feel like it’s a good idea to back into your vehicle.
You can be the best driver on the planet and still need auto insurance. You spent a lot of money on your car – it’s a really good idea to protect your investment. Just go ahead and get auto insurance so that you’re covered in case of an accident.
- You need car insurance, plain and simple
- Even if you’re a perfect driver, things happen that can wreck your car or get you in an accident
- Some places will require that if you have a drivers license, insurance is mandatory
7. Pet insurance
Monthly cost: $-$$
Is it necessary: No
Ease of application: Easy
Coverage amount: $-$$
Who needs this: Pet owners who want a little peace of mind
When you adopted Fido or Fifi, you already knew that you were going to have to take them to the vet every now and then. Dogs, cats and other animals need routine checkups just like people do, and in most cases there will be vaccinations that are mandated by your local government. For instance, dogs will require rabies vaccinations in most parts of the world.
These things cost money, but it’s money you should have thought about before you adopted your fur baby. If you didn’t, there’s still a good chance that pet insurances won’t be necessary for you. The cost may outweigh the benefit.
Pet insurance is pricey. You can expect to pay around $50 per month for this insurance – that’s $600 each year, and not everything is covered! Trips to the vet are expensive, but there’s a good chance your pet insurance will cost even more.
If your pet is older or has disease, your premiums will be higher. Again, not every service is covered, either, so you’re going to be paying a ton of money to look out for your pet’s health. Our suggestion to you is that, if you must have pet insurance, you should choose a plan with a low monthly premium that covers the full cost of your pet’s checkups. And in the future, please consider how much your pet’s healthcare will cost … before you adopt.
- Pet insurance isn’t always a good deal and sometimes costs more than your pet’s healthcare
- Older animals and those with health conditions will cost even more
- Choose a low-premium plan if you insist on insurance for your pet
8. Dental insurance
Monthly cost: $-$$
Is it necessary: Sometimes
Ease of application: Easy
Coverage amount: $$-$$$
Who needs this: People with children, people who don’t have dental as part of their health insurance plan
Teeth are expensive. They really are. You’ve got to get those puppies checked out every six months or so, and while it’s not fun, it’s important to protect your teeth from decay and other nasty stuff. Kids, too, are prone to cavities, gingivitis and more, so you’re going to be paying for those babies to get their pearly whites checked and cleaned.
Now, a dental exam and cleaning doesn’t cost a ton. You can pay anywhere from $30 to $200 to have an examination and a cleaning. But what happens when your ten year old bites the dust on his bike and his front tooth pops out? When your four year old has a cavity because her babysitter always “forgets” to brush her teeth?
Dental insurance is a good idea, in most cases. It’s not too expensive – the premiums can be as low as around $10 per month. There is usually a maximum annual and lifetime cap on how much can be covered, but if you don’t have a dental rider on your health insurance, we think you should look into buying an independent dental insurance plan.
- Dental insurance is easy to qualify for, and it can save you a lot of money
- Dental accidents happen, whether you’re four or 94
- This insurance isn’t always included in your health coverage so you may have to buy a separate plan
9. Burial insurance
Monthly cost: $$
Is it necessary: Kind of
Ease of application: Easy
Coverage amount: $$$
Who needs this: Any person who expects to die at some point
The last type of insurance on our list of insurances is burial insurance. Now, it sounds morbid and sad, but everyone dies some day! Funerals are expensive, as are burial plots and caskets, so it makes sense to be prepared, right? The average North American funeral costs upwards of $10,000. Do you want your family to worry about that when they’re grieving the loss of you?
There are a few things you can do to combat this. The first is simply to choose cremation. Cremation costs an average of about $1,000 and is affordable for just about any family. You can state in your will where you’d like to be laid to rest.
The second option is that you can buy your cemetery plot and casket in advance. Again, it sounds morbid but it will save your family a lot of heartache.
The third option is burial insurance. You can have final expense insurance will ensure that your family doesn’t have to worry about extraordinary expenses when you die. The problem is that it’s super expensive. You can pay about $50 per month for burial insurance as a 50 year old … and you’ll be paying that for decades! If you live to 80, you’ve paid out $18,000!
The choice is yours – it’s your family and it’s your call to make. We recommend either having a savings account in place to help cover your burial costs, to purchase your plot and casket before your death, or to simply choose cremation.
- Burial insurance is super expensive – you may be better off just purchasing your plot and casket now
- Cremation is another affordable option to keep your loved ones from struggling when you die
- You can pay tens of thousands of dollars in burial insurance for just a few thousand dollars in coverage, so do the math before you buy
Conclusion
It’s good to have someone have your back when things go wrong – even if that “someone” is an insurance company! There are oodles of types of insurances out there to choose from. Some you need, and some you don’t. Do your research before you sign up to pay the premiums, then enjoy the peace of mind your insurance can give you.
