7 Different Types of Insurance You Need | Our Complete Guide

Insurance. It’s not an exciting topic, but it’s a necessary one. A discussion on personal finance and business isn’t complete unless you’ve properly addressed the risks to your assets and income.

Most people, I would think, have retirement savings and debt under control long before they tackle the subject of insurance as a whole.

• You likely need a policy for life insurance, health insurance, homeowners or renters insurance, car insurance, disability insurance, long-term care insurance, and business insurance.
• You likely do NOT need policies for mortgage life insurance, identity theft insurance, cancer insurance, life insurance for children, private mortgage insurance, and any type of insurance that covers you for things you could just save for.
• Having insurance is necessary to protect ourselves and our families when difficult times occur and your savings balances aren’t enough to cover it.
• Insurance provides protection and peace of mind, knowing that your health, your family, your assets, and your business are cared for when you need it the most.

But there are many different forms of insurance. It’s hard to know for sure what to do. You may be asking, “what types of insurance I need to protect myself and my family?”

Below I’ll take a high-level view of the various forms of insurance and provide some basic information you should know about each one.

1. Business Insurance

If you own a business, you’ll want to protect your investment by getting business insurance. It’s not quite as simple as it sounds, though. There are multiple types of business insurance that cover various aspects of your business.

Some types of business insurance are legally required, depending on the specific industry. There are also other types of business insurance that are simply good to have in place.

Common Kinds of Business Insurance

Some small business insurance is required by law. Some may be required by your lender or investors. And some insurance is just a good idea for your protection.

It’s important to know about all of these types of insurance. That way, you can determine the best package for your budget and needs.

Legally Required Business Insurance

The legal requirements for business insurance can vary from industry to industry. However, most common legally required insurance policies you may need for your business include:

• Workers compensation insurance: If you have any employees, you must carry this insurance to cover their income and pay their medical expenses in case they are injured on the job. This kind of insurance also protects you as a business owner. That’s because many workers compensation statutes do not allow an injured employee to sue their employer for most injuries that occur at work.
• Unemployment insurance: This insurance requirement for employers will guarantee a portion of your employees’ wages if they lose their job. Unlike others on this list, you do not need a specific insurance policy for unemployment insurance, as you pay into federal and/or state unemployment benefits through your payroll taxes.
• Disability insurance: Depending on which state you live in, you may be legally required to carry disability insurance for your employees. This insurance covers partial wage replacement for eligible employees (generally only full-time employees) if they get sick or injured outside of work. This is only a legal requirement in California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island.
• Commercial auto insurance: If driving is part of your business, then you will also need to carry commercial auto insurance. Remember, this isn’t just for delivery, taxi, or courier businesses. Real estate agents who sometimes ferry potential clients in their cars will also need to purchase commercial auto insurance to cover themselves. Your personal auto insurance does not cover vehicles you drive as part of your business.
• Commercial property insurance: Whether you rent or own the commercial property where you conduct your business, carrying this insurance will cover both the building and its contents in the event of a fire, flood, vandalism, theft, or other major covered incident.

Common Additional Business Insurance

Of course, just getting the bare minimum coverage required by law may not be enough to protect you from financial emergencies. That’s why it’s important to look into other types of insurance that can cover your specific small business insurance needs:

• General liability insurance: While this kind of insurance is not a legal requirement, it’s an important type of coverage that every small business owner needs. This covers the costs of claims made against your business for property damage or bodily harm. For instance, if a customer slips and falls inside your store, breaking her glasses and giving herself a concussion, your general liability insurance will help cover the costs of replacing her glasses and getting medical attention.
• Professional liability insurance: This kind of insurance helps protect businesses from claims stemming from errors that your business committed. For example, if a client claims that the shampoo that you use as part of your dog-grooming business was used incorrectly and ended up dyeing the pooch bright green instead of ridding it of fleas, your professional liability insurance can help cover the costs to settle the claim.
• Commercial umbrella insurance: Just like your personal umbrella policy, a commercial umbrella insurance policy extends the limits of your liability coverage and can potentially cover losses that are not covered by other insurance.
• Cyber liability insurance: Any small business that may be vulnerable to a data breach that could leak sensitive customer information (such as credit card numbers) should get cyber liability coverage. This insurance will help cover expenses for such an event, including notification costs, credit monitoring for affected customers, fines and penalties, and any losses due to identity theft.
• Business owners policy (BOP): This type of policy packages together several different types of small business insurance. Usually, BOPs include commercial property insurance and general liability insurance, along with some other types of insurance. Bundling several different necessary insurance policies together in a BOP can sometimes be a cost-effective way to get all the coverage you need without buying several individual policies.

These are the most common types of business insurance. However, there are a number of policies that can get quite specific to your industry and needs. While most small business owners will have their bases covered with some of the above policies, it’s always a good idea to read up on what industry-specific policies experts recommend for your business.

Related: Do You Need Insurance For Your Internet Business?

2. Life Insurance

Probably the most under-purchased (is that a word?) form of insurance is life insurance. This type of insurance protects your family from the potential loss of income from your death. Not fun to think about. But it’s a reality.

The big questions in the life insurance world typically revolve around the differences between term and whole life insurance. If you end up choosing term life insurance as I did, then the questions shift to “how much life insurance do I need?”

Related Guide: How to Buy the Best Life Insurance in 7 Easy Steps [The Ultimate Guide]

Don’t worry – you mainly need to get insurance on the earners in the family, plus anyone who makes an economic impact.

For example, a stay-at-home parent may not make a salary, but they’re saving your family money on childcare costs. You should also have coverage to make up that difference in case anything happens to that parent. You can usually do without life insurance on your child.

My Life Insurance Story

I have been carrying life insurance ever since Mrs. PT and I welcomed our first child. Prior to that, I was a little clueless about life insurance and had never looked into purchasing any for myself. All that changed when we found out our first baby was on the way.

Becoming a father was when I realized how important life insurance is for my family. We had our children because we thought I’d always be around to help support my family. If something were to happen to me, I want my kids to be raised by their Mom and not a daycare. I also don’t want my wife to have to use every dollar she earns to support the kids.

I recommend purchasing life insurance for anyone who is in a similar situation. If you have dependents who are counting on your income, it makes sense to have a life insurance policy in place. This will make sure your family will be taken care of no matter what.

In our case, a simple term life policy made the most sense. But every family’s needs are different, which is why it’s so important to do your homework to find the best policy to meet your needs.

One big reason people give for not getting life insurance is the fear that it can be complex and expensive to find the right policy. They worry about having to run the Ned Ryerson hard-sell gauntlet and end up having to pay through the nose for a policy.

But life insurance doesn’t have to be complicated or expensive, especially in the digital age. I was able to find a policy that worked for our family by doing my homework and requesting a quote online. If you want some extra guidance for shopping for life insurance

Living Our Dreams

The insurance policy that I carry is more than just peace of mind. It’s also a part of how Mrs. PT and I are living our dreams.

We plan on living well within our means throughout our lives. In fact, our goal is to be able to live within only one of our incomes at all times. This plan is what allowed Mrs. PT to go to grad school for a time, and what allows her to stay home with our kids right now.

By living within our means, we can live our lives based on what is best for our family–rather than based on what we need financially.

Our dreams include living a rich life filled with pursuits, giving back, adventure, and raising happy, healthy kids. This includes reaching financial independence to ensure we’re there with them every step of the way.

Having life insurance in place has also helped us make this dream of a family-centered life, rather than a money-centered life, a reality.

To begin with, having life insurance in place offers us a sense of financial security and peace of mind. We know that our family-centered life will continue even if something were to happen to me. That kind of peace of mind allows us to really be present with each other as a family, rather worry about possible futures.

We have also been able to focus on other financial goals now that we have a life insurance policy. Prior to purchasing our policy, I believed in self-insuring as much as possible by eliminating our debts and building solid savings accounts.

I still believe in self-insurance, but having life insurance in place offers a solid plan for the future. It frees up the money we’d otherwise use for self-insurance. That means we can focus on our other big financial goals, like saving for retirement and for college.

Finally, as an entrepreneur, I sleep better a night knowing that my life insurance policy is there, even though I no longer have employer-based life insurance. I’ll be taken care of through my own policy, which leaves me free to focus on building my business and being a great Dad.

Purchasing a policy that fits your needs is like a promise to help protect your loved ones no matter what happens–giving your family a financial safety net when they need it the most. I am more present in both my career and my family life because of our life insurance coverage.

3. Health Insurance

Health insurance comes in many forms, but it’s generally going to cover your medical expenses for any health-related issues (i.e. you have a heart attack) you experience. There are two main types of health insurance: group and individual.

Group health insurance is typically what you get when you work for a company. The risks and costs are spread out among the group members, so it’s typically better insurance for you. It’s better because it’s usually cheaper and it covers more.

Individual health insurance is something you’ll have to get for you and your family if you don’t have an employer, or you work part-time. Since this type of insurance isn’t purchased by a group, you have to bear the costs and risks to yourself.

Related: Best Health Insurance Options for the Self-Employed

For this reason, individual health insurance is usually expensive and doesn’t cover as much. All is not lost, though. There are plenty of ways to save money on health insurance, including using a health savings account and shopping around for health insurance quotes.

Recently, health insurance reform has come to the U.S. There are lots of changes going on that are going to affect the way this insurance is provided and purchased in the future. Be on the lookout for how these changes will impact you and your finances.

Healthshare Plans

When it comes to healthcare, another option for people to consider is a healthshare plan. Healthshare plans are not insurance. However, they are an alternative to traditional insurance that many people have turned to in recent years.

See our list of the best healthshare plans.

Healthshare plans are medical expense sharing programs where members share in each other’s medical expenses. Joining a healthshare program can help save money because you’ll no longer be paying huge monthly health insurance premiums. There’s no need to pay ridiculous amounts of money for unsubsidized health insurance.

My family made the jump from traditional health insurance to a healthshare plan called Medi-Share. We’ve had a wonderful experience so far and have saved money too. We used to pay $1,100 a month for health insurance through Humana. Now we pay under $300 a month for a $10,500 Annual Household Portion, which is like a deductible.

Medi-Share is a non-profit, medical expense sharing program for Christians. People need to meet certain requirements to qualify. That’s one of the reasons that you save money using healthshare plans, like Medi-Share. It works similarly to health insurance in many ways too.

We even received a health incentive deduction by meeting certain health criteria, like blood pressure and BMI. Healthshare plans have disadvantages too. Not all medical expenses are covered and Medi-Share contributions aren’t tax-deductible. It’s important to read through the details of the program to make sure a healthshare plan makes sense for you.

What’s great about Medi-Share is that there’s no open enrollment period. You can join Medi-Share anytime. It’s been a game-changer for my family and has put tons of money back into our pockets.

Here’s our full Medi-Share review.

4. Homeowners Insurance

When you buy a home, condo, townhome, or even a mobile home, it’s likely a good idea, and maybe a requirement by your lender, to purchase some homeowners insurance.

I would estimate that this type of insurance can cost annually as much as a mortgage payment for you. You can now run a home insurance quote online as you can for car insurance.

What you get in return for your annual or monthly payment is a bit of peace of mind that if something were to happen to your home, like a fire, earthquake, flood, storm, etc., you would be repaid for the damage.

Now you can see why a lender is interested in making sure you have this insurance. They don’t want to be stuck with the bill if something happens and you aren’t protected by the homeowners insurance.

How Much Is Homeowners Insurance?

It can be expensive. Our first policy cost us $1,430 annually and covered our “dwelling” for $275,000 and personal property for $192,000. Additionally, it had general liability coverage of $300,000 and a $1,000 deductible, among other minor things.

I recently called my agent to discuss my policy. While we were on the phone I found out that the State of Texas (Department of Insurance) provides a free website (HelpInsure.com) which shows you the average insurance rates for different companies in Texas. Pretty handy. If you’re in the hunt for new homeowners insurance I suggest you utilize your state’s tool.

You can also use Gabi to shop your home insurance policy. Start your free review now.

The No-Escrow Difference

Because I don’t escrow my insurance and taxes (i.e. pay for them along with my mortgage) I have ultimate flexibility when it comes to which insurance company I work with, when I make my payments, and how much my deductible will be.

In my case, not being escrowed made a big difference in the fact that I was flexible with the amount of deductible I was willing to accept.

Going to a 3% deductible means I would be roughly $4,500 worse off if a fire takes out my home or a tree falls on the roof than I would have been with the $1,000 deductible. I’m willing to accept this risk.

This move saves me over $500 annually. Seen another way, I can take on a total loss every nine years and still come out ahead.

My advice is to be flexible with any insurance policy with regard to the amount of deductible. But don’t just chase the bottom line on the payment. Look at the overall picture, and certainly, never take on a deductible that you don’t have saved up already.

Many states regulate deductibles, so don’t assume you can do 3% as I did.

My final word is that it’s important to get homeowners insurance rate quotes annually and pay in full, if possible. Paying in full means you’ll typically avoid any monthly service fees.

Even if you escrow and pay your insurance each month, stop down annually and make a call to get homeowners insurance quotes. Check rates with Liberty Mutual and also shop your insurance with Gabi.

Other Important Notes About Homeowners Insurance

• Look for discounts like multiple policies or security systems.
• As with anything, don’t focus solely on cost. Get adequate insurance coverage.
• Your credit history affects your premiums.
• Did your home recently gain or lose value? You may not need as much insurance coverage.

Should You Get Landlord Insurance?

Landlords should consider landlord insurance as part of their risk management strategy. This specialized form of property insurance is designed to protect them from financial losses due to damage to the rental property, theft, or liability claims from tenants.

It ensures coverage for income-producing properties, which may not be covered under a standard home insurance policy. Landlord insurance covers loss of rental income if the property is damaged and becomes uninhabitable. This protection can be especially helpful in cases where rental income is used to cover mortgage payments or another expense.

Where should you get it? You can get it from traditional insurance companies, but there are some insurtec companies that offer it. We’ve got a list so you can compare the best landlord insurance plans.

Once you have homeowners (or landlord) insurance it’s a good idea to consider an umbrella policy as well.

Add Umbrella Insurance (and the Real Reason You Need It)

Lawsuits are a way of life in America now.

There are many examples of incredible jury awards for damages from civil lawsuits. There are examples of dog bite cases resulting in judgments for millions.

Liable, slander, and defamation lawsuits stemming from the Internet have earned lawyers and plaintiffs tens of millions.

And, horrible and negligent automobile accidents top the list for large lawsuit verdicts across the country.

So, what is a person to do?

You could simply hide under a rock and hope bad things will not happen to you and your family. But that’s likely not a smart choice.

You likely need umbrella insurance to protect your future, assets, and income.

Umbrella Insurance Even With No Assets

A lot of people think umbrella insurance is only for the rich and famous who have a lot of assets that need to be protected from lawsuits.

But that’s not true.

Lets say, for example, you were negligent and caused a horrible car wreck. You just graduated from college with a mountain of student loan debt and only have a part-time job and a lousy apartment to show for your troubles. What could someone get from you by suing? You have no assets. You do not have a house or investment portfolio to tap to pay for a judgment. Or, do you?

Like most people, you are forgetting about your most important asset while you are young. It is relatively untouched and you don’t even realize it. It isn’t your home, car, or what little investments you may have accumulated when you are young.

Your greatest asset is your ability to earn an income in the future.

According to the National Association of Colleges and Employers, the average college graduate with a Bachelor’s Degree earns a little over $44,000 per year. With pay raises, inflation, and promotions, a graduate with only a Bachelor’s Degree can expect to earn an estimated $2.25 million over the course of his or her lifetime.

If you lose a lawsuit and receive a judgement against you for damages, you could find your future wages garnished to help pay that award. With a motion filed by the person that you wronged, the court can issue an order for the garnishment of your wages.

This order would require your employer to withhold a court-determined amount from your paycheck every month until your debt or lawsuit judgment has been paid. When your wages are garnished your employer will send the monthly payment directly to the person you owe money to instead of paying you that portion of your earnings.

That’s what you’re protecting with umbrella insurance.

Simple Things That Leave You Vulnerable

You may be quite surprised at lawsuit triggers. Without even realizing it, we tend to open ourselves and our families up to needless risk for lawsuits.

Does your family have a trampoline in your backyard and allow neighborhood children to play on it?

Are you a teacher or a parent who chaperones your children’s field trips with the school? Do you let your children’s friends have sleepovers, playdates, and the like in your home?

What about the type of dog you own? According to the Insurance Information Institute, over 30% of all homeowner liability claims were the result of dog bites.

The average claim paid out by homeowner’s insurance coverage was just $26,000, but there is always the possibility for severe cases and claims. Any judgment that tops $500,000 can easily exceed the standard homeowner’s liability coverage that is found in most homeowner’s insurance policies.

These are just a few of the many examples that just barely scratch the surface of your potential liability.

• Do you have a cleaning service, lawn crew, or handyman work in your home or on your property?
• You can also find yourself potentially liable for issues with your children’s swing set, treehouse, and other play sets.
• Do you have a teenage driver?
• What if he or she was bullying others on social media and the unthinkable happened?
• Are you addicted to texting while driving?

You can quickly see how your imagination, and the imagination of lawyers, can quickly run wild.

If you want to get advice on whether your situation warrants umbrella insurance, you can ask your insurance agent.

Or if you don’t want to go that route just yet, consider Just Answer. You can post your question and get a response from a lawyer any time of day, 24/7.

How Much Is Umbrella Insurance?

Umbrella insurance is relatively inexpensive to purchase.

According to ACE Private Risk Services, a global insurance and reinsurance company, the cost of a $2 million umbrella insurance policy typically costs less than $500 in premium per year for the typical American family of four.

Increasing your coverage to a $5 million umbrella insurance policy only adds about another $100 in premiums per year. Keep in mind you may need to increase your other liability insurance (home and auto) to qualify for umbrella insurance.

The likelihood of being sued for both warranted and unnecessary events is increasing in America everyday. But you can protect yourself with umbrella insurance. Do not make the mistake of thinking it is too expensive or that you do not need it because you don’t have assets.

What About Renters Insurance?

Let’s take a look at a few things you the tenant can do to protect your rented apartment or condo in case disaster or damage strikes.

Often people who rent try to save a bit every month by forgoing renters insurance. Although your building is insured by the landlord, the items in your apartment are not insured. Meaning your 42 inch TV, your new sofa, your laptop, and any other valuables are not covered by any insurance.

What you’ll need to purchase as a renter is HO-4 coverage or HO-6 coverage if you live in a condominium. You can purchase these coverages from any insurance company and it will protect your valuables in case of 17 different perils.

Some of the big ones, according to InsuranceGuide101.com, are:

• Fire or lightning
• Windstorm or hail
• Vandalism and theft
• Electrical surge damage
• Water related damage from home utilities

Contact any insurance agency today and they’ll walk you through the steps to purchase renters insurance – like listing the value of your items and deciding on a deductible price.

If you’re wondering how much is renters insurance per month. Know that monthly coverage will run anywhere from $10-50 a month depending on the extent of your policy and situation.

Renters Insurance For Your Situation: Earthquakes, Tornadoes, Floods

You may have noticed that in the 17 perils covered by the HO-4 renters insurance, none of the large scale natural disasters are covered. You’ll have to go a step further to protect your living area from these types of disasters.

Insurance for earthquakes, tornadoes, or floods is a type of property insurance. There is no all-reaching disaster coverage so you’ll have to figure out what disasters have the probability of affecting your area. See the probability of a tornado in your State.

Contact your insurance provider today and ask them to walk you through the steps for purchasing this type of coverage.

Keep Your Renters Insurance Updated

A lot can change over the course of the year. Keep your list of insured items updated and fresh by going over your personal inventory every 6-12 months. If you’ve purchased a new $3,000 refrigerator but the insurance company doesn’t know about it, that item won’t be replaced after a fire or theft.

When this happens, all you have to do is look around your apartment or condo and see if anything of large value has been purchased. If so, contact your insurance agency and inform them of the item so they can update your policy.

5. Car Insurance

Auto or car insurance is probably the most well-known and commonly owned of all the insurance types. This, I suspect, is because it’s required in most states. In my state, for instance, you need to have car insurance before you can register your vehicle or have it inspected.

Most states will require a minimum level of coverage for your car to protect others in case you have an accident. Deciding which types you need is something you need to research and determine for yourself. In that sense, car insurance is probably the most used, but least understood form of insurance.

Although car insurance is usually a requirement if you drive, it doesn’t have to be expensive. And you certainly shouldn’t pay premium prices when you don’t have to. I’ve found that with a little research it’s easy to save money on auto insurance. You can get a direct quot from several companies. You may want to try Esurance, an Allstate company.

Learn more tips for finding affordable auto insurance.

Compare Car Insurance Quotes With Gabi

Gabi can start you off on the right track when car insurance comparison shopping. It’s a completely free service!

Gabi works with over 40 insurance carriers to help narrow down the best choices for you. You can do everything online, with no need for irritating phone calls. It takes just two minutes to match your current car insurance to multiple providers, helping you to determine the best price and value for your needs.

With Gabi, they’ve streamlined a typically tedious process into just minutes. All you need to do is link your current car insurance policy for them to compare it to similar policies from different providers. They’ll compare up to 20 quotes for you simultaneously.

You can also comparison-shop for policies to insure your home, rental, motorcycle, or RV. They even compare umbrella policies, too.

Since they’re not a lead generator, you can trust that Gabi won’t cold-call or spam their customers. They’re an insurance comparison engine as well as an online insurance broker, licensed in 50 states.

Hoping to score extra discounts through bundling car insurance with another type of insurance? Gabi can help with that.

If you wish, you may be able to purchase a cheaper car insurance policy directly through Gabi. Another nice feature they offer is that once you’ve selected a quote, they can assign you a personal advisor to guide you through the rest of the process.

Take Action: Get started with Gabi

Do Safe Driver Discounts Really Help?

You would think that being a good driver means that you can save a lot of money on your car insurance bill.

I tend to be somewhat skeptical about any advertised “bargains,” so I’ve often wondered what the fine print would be on a safe driver discount.

Luckily, I know a friendly neighborhood insurance agent who was able to answer several of my questions. Here are some of the safe driver “catches” that the commercials don’t tell you about:

• For some insureres, all insured need to be a safe driver. Your reckless teen might prevent you from getting a discount.
• Some companies will only offer the safe driver discount to those individuals who sign up for the highest level of coverage.
• Three years of good driving history is not a hard and fast rule. Some companies will go back as far as five years. And if you change companies, many insurers will make you wait a year before offering you the safe driver discount, as they’d like to have some history with you prior to handing you discounts.
• Finally, allthough your insurer might tell you that you get some percentage off for good driving, it might not be as simple as that. The percentage is not necessarily taken off the entire premium—instead it will be deducted from one line of coverage, such as your liability premium.

The bottom line is that it is important to know that signing up for a safe driver discount does not necessarily mean a huge difference in your bill.

When to Drop Full Coverage Auto Insurance?

Full coverage auto insurance generally refers to a policy that includes comprehensive and collision insurance in addition to the state minimum.

Comprehensive insurance comes in handy if your car is stolen and not recovered, or damaged by anything other than a car accident (e.g. fire, flood, or act of God). This will pay for your car to be fixed or replaced for the amount that your insurance determines to be the car’s actual cash value, minus your deductible.

For a general estimate of your car’ s worth, consult Kelley Blue Book at www.kbb.com. Collision coverage pays for repair or replacement (minus your deductible) in the case of a crash.

The question is when these types of coverage are necessary, and when you can pocket the money you’d otherwise send to insurance. Up front, you should know that unless you have paid off your car loan, you won’t be able to drop full coverage. After that it depends on the age and value of the car.

A newer, more expensive car ought to carry full coverage and an older, cheaper car should not. But what if you drive a car somewhere in the middle range? How do you know if you are carrying too much coverage?

There are several factors to consider. For example, seven of the ten most commonly stolen cars in the United States are more than a decade old. So even if you drive an older car, if you can’t replace the car yourself, you might want to keep your comprehensive insurance.

Something else to consider is the cost of parts. If you drive a European car (which typically do not hold their value) or an older reliable car, such as a Honda or Toyota, you can expect the price of parts to be prohibitive. Damage to a single part can “total” a low- or mid-value car, even if the car is otherwise drivable.

In that case, it does not make fiscal sense to keep collision coverage. A fender-bender could result in the total loss of your car, and it would be difficult to buy a replacement with the Blue Book value. Your money is better spent in saving for a new car.

A final factor to think about is where your car spends most of its time. Urban drivers face many more automobile hazards than suburban or rural drivers. If you are carrying full coverage and do little to no city driving, consider changing your auto insurance policy.

Whatever plan will give you enough money to put you back on the road after a loss will be the one that is best for you. For me, that meant reviewing my auto insurance policy and raising my deductible initially.

I saved the difference in my payment until I had enough put away so I could afford to drop my full coverage. Now, I can buy a replacement vehicle should my 12-year-old vehicle go to that big garage in the sky.

6. Disability Insurance

This type of insurance helps to cover your loss of income from some type of disability which causes you to lose your job or prevents you from earning an income. You’re far more likely to be injured than killed, so it’s probably smart to have some of this insurance.

Like life insurance, most employers have a basic policy on their employees. But that might not be enough for you, and/or you might not have a job with a company. The self-employed should really look into this type of coverage.

Related: Self Employed? Here’s Everything You Need to Know About Disability Insurance

It’s something I need to do for sure. There’s lots to know about disability insurance. Mainly, it’s important to understand the distinction between short-term and long-term disability insurance. With short-term disability insurance, the benefit period is typically three to six months. Long-term disability insurance offers a longer benefit period, usually measured in years.

Request a quote for disability insurance here.

7. Long-Term Care Insurance

Who will take care of you when you can’t take care of yourself?

Whether it’s due to an early onset of Alzheimer’s or you’re simply too old, if you can’t take care of yourself, you’ll need help.

Your loved ones can only do so much. You may be too wealthy for government assistance, and you may not be wealthy enough to pay for it all yourself. This is where long-term care insurance comes in.

What is Long Term Care Insurance?

Long-term care insurance is just what it sounds like: insurance that will help pay for your long-term non-medical care needs – needs like assisted living, nursing home care, and home care.

I spoke with Wendy Boglioli, Long Term Care Planning Specialist, Olympic Gold Medalist, and National Spokesperson for Genworth Financial and here’s what she shared.

Best Time to Buy Long Term Care Insurance

The best time to buy a long-term care insurance policy is when you are healthy! Because long-term care insurance is fully underwritten by an insurance company, they look at insuring healthy people today (think of trying to buy home insurance when your house is on fire).

With that in mind, a person’s health will be the determining factor in both applications being taken and being issued.

What is the average age of a person buying a policy today? Ten years ago it was 68. Today it is around 54. Wendy says,

“most of my clients today bought in their 40’s because their health was the best, and they were young (which is a huge factor as well when it comes to annual premium). Personally, I bought my policy at age 42, and my husband at 45.”

For them, it was clearly a business decision. That, plus the fact that they are so active, climbing, skiing, cycling, etc..

They asked themselves “if anything happened to us today where would the money come from?” They immediately said, “from someone else”. So they chose to apply for long-term care insurance coverage through Genworth.

Quick Stats: Long Term Care Insurance Cost

So how much does long-term care insurance cost? Well, information from longtermcare.gov tells us:

“The cost of a long-term care policy varies greatly based on your age at the time of purchase, the policy type, and the coverage you select. In 2007, the average long-term care insurance policy cost about $2,207/year, covered 4.8 years of benefits, excluding the 20 percent of people who elected lifetime coverage, had a daily benefit amount of $160, was a comprehensive policy covering both facility and at-home care, and included some form of automatic inflation protection.”

The Best Long Term Care Insurance Companies

There are great companies in the marketplace, and ones perhaps not so good. Like everything right? Always look at the companies that have been in business for over 20 years.

Keep in mind the industry itself is very young (only 38 years old), unlike life insurance and home insurance. So it is absolutely important to look at the companies that are committed to their policyholders and the long term care insurance market itself.

Also look at how many policyholders a company actually has. Remember, the bigger the pool the more the premiums are spread out.

Also, the type of people that the company insures matters. Companies continue to pay out in claims for those that go on claim. When a company insures individuals that are already in need of care, or care right around the corner, that can lead to higher premiums for everyone.

Take a look at the criteria the top companies want in their pool. If there is no limit on who they will insure, or if they begin paying out in claims in a huge way immediately, not good.

Once the homework is completed, work with your financial advisor. If you do not have one, work with a long term care financial professional. From there work with that professional to make sure you understand your coverage.

Get a Long Term Care Insurance Quote

If you want to work on your own to find and compare quotes, here are some resources:

• Genworth
• Mutual of Omaha

Other Types of Insurance

Travel Insurance

Planning a vacation is supposed to be fun, which means many travelers neglect to consider travel insurance. Vacations can go seriously awry, leaving you with a stressful situation rather than a relaxing respite. If you are out all of the money you spent on the vacation and forced to spend additional funds to get home, you may decide never to leave home again.

If you are planning a big, expensive travel experience sometime this year, you might want to consider protecting yourself financially in case of vacation disaster with one of these options:

Travel Insurance Through Your Credit Card

If you purchase your travel using a credit card, you will often be offered some sort of travel insurance as a perk of using the card. Credit cards offer insurance on anything from rental car collision to trip cancellation to fatal travel accidents to lost luggage.

However, the insurance offered by credit cards should be considered a secondary form of travel insurance, since there are many rules, exclusions, and coverage holes in the average credit card travel insurance package. And the most common need for travel insurance—covering a cancellation due to illness or family emergency—is only covered by 15% of credit cards.

In addition, credit cards do not offer medical or evacuation coverage. For those traveling abroad or on a cruise, this is an important exclusion to note. If you were to fall ill or be injured outside of the United States, you could potentially be on the hook for your medical care and emergency flight back home.

Trip Cancellation Insurance

This offers you a refund for the price of the trip should you be unable to take it. Generally, cancellation insurance costs 5%-10% of the price of the trip.

For travelers taking a structured vacation—like a cruise or a tour—the company will often offer a cancellation waiver. Waiver prices vary from company to company, but they are generally much lower than cancellation insurance.

The waiver is similar to cancellation insurance, but it has a number of restrictions, including a prohibition on canceling your trip at the last minute. Unfortunately, that is when most vacations need to be cancelled.

The typical timeframe for canceling a cruise for a full refund is more than 75 days before the ship sails. After that point, you could lose up to 75% of your purchase price—or the entire purchase price if you cancel within two weeks of the sail date.

Adding 5%-10% to the price of your trip could help you rest easy that your vacation won’t be an expensive empty room on a cruise ship.

Personal Effects Coverage

This is one type of travel insurance that most vacationers probably don’t need. Often, your renters or homeowners insurance will cover the loss of your possessions, no matter where those possessions happen to be in the world.

However, if you’re traveling with a great deal of expensive photography equipment, sports gear, or your heirloom jewelry, it might be worth your while to purchase an endorsement to your existing homeowner’s policy to cover those items while you are traveling.

The endorsement will cost you less than a travel-specific personal effects insurance policy, and it will protect your valuables just as well.

Travel Medical Insurance

In many cases, your medical insurance will cover some or even all of any medical emergency you have while away from home.

However, each policy is different, and it’s a good idea to go over your policy and figure out what is and is not covered. For instance, you may be covered for an extended stay in a foreign hospital, but you might have to pay upfront and be reimbursed.

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Other forms of insurance you probably don’t need include identity theft insurance, accidental death insurance, credit card protection insurance, pet insurance, dental insurance, loan protection insurance, and many others.

When preparing for the future, make sure insurance is in your plans. Protect yourself and what’s important to you by getting the insurance coverage you need. Use the resources mentioned above to help you get started today.