The other day I was talking to someone, and they told me they have skipped paying a few of their insurance policies because they don’t need them and because they can’t really fit them in their budget.
Instead, they spend their money on other items (very expensive cars, vacations, going out to eat nearly everyday and so on). I’m not one to judge, but I think that insurance is very important in a person’s life unless you truly believe that you can self-insure yourself.
Insurance is important because it can help protect you and give you peace of mind. If you don’t have insurance and something unexpected comes up, then you may end up drowning in expenses and going into major debt. This can then affect many different parts of your life, such as your life, your budget, your credit, and more.
Below are four different types of insurance you should think about including in your budget:
1. Health insurance.
Probably the most important type of insurance that you will need in health insurance. I know too many people who are buried in medical debt. Some of the time they even had health insurance.
You need to find health insurance, be insured, and figure out an amount that will work for you. I know some who have no deductible, and others who have a $12,000 deductible. If you have a higher deductible (such as $12,000), then I recommend that you have that money saved just in case something were to happen to you.
2. Life insurance.
If you have health insurance, then the next thing you may look into is life insurance. Too many people skip this and I think it’s all too important. If you have children, then you must have life insurance. If you have people who rely on you or if you have co-signers on any of your loans, then you should have life insurance as well so that you don’t leave those behind you with debt if you were to pass away.
Life insurance isn’t usually too expensive either. Many people think that it life insurance is unaffordable but that is usually not the case.
3. Home or renters insurance.
If you own a home or if you rent a home, you need to have insurance. Our home insurance is around $700 a year, and it gives us major peace of mind. If you have a mortgage, your bank will probably require that you have home insurance anyways.
If you rent a place, you should have renters insurance as well. This can protect your items (depending on the exact policy you choose) if there is a flood, a theft, and so on. It’s usually VERY cheap too, so you have no reason to not look into it.
4. Car insurance.
Car insurance is very important if you have a car. You might only choose liability coverage, or you might choose full coverage. This all depends on how much your car is worth and what you are comfortable with.
What other types of insurance am I missing?
Do you have everything on the list above?
Image via Flickr by David Hilowitz