It’s impossible to predict if or when something bad might happen, but you can help protect yourself – at least financially – when the unexpected does occur. 

Obtaining the right type and amount of insurance is the best way to protect yourself and your family when emergencies arise. That said, there are so many insurance options, and it can be difficult to choose the best policies for you. While your lifestyle, age, and family size play a role in which type of insurance is best for your needs, experts agree that everyone should have the following four types of insurance:

Health Insurance

If you or a family member suddenly became seriously ill, it could be enough to send you broke at a shockingly rapid rate. As such, health insurance is a must for everyone. With the average cost of just one day in the hospital being upwards of $2,500, you really can’t afford to be without it. 

In addition to medical insurance coverage, you should also consider comprehensive dental cover and some level of optical insurance as well. While some employers provide health insurance benefits to their employees, you may have to purchase these policies on your own if yours does not. It can be expensive obtaining health insurance, but just one accident or serious illness without insurance can lead to bankruptcy fast.

Life Insurance

Life insurance offers two major benefits: it enables your loved ones to pay for your funeral costs and it provides for them after you’re gone. Experts suggest purchasing a life insurance policy worth ten times your annual salary. Unfortunately, not everyone can afford such a policy. 

If you fall into this category, you’ll want to consider a few factors when figuring out how much life insurance you should get. The policy should not only cover your funeral costs but also daily living expenses such as a mortgage, credit card bills, childcare, taxes, and future college expenses. 

The sad reality is that most families won’t be able to meet their financial obligations within a month of the main breadwinner in the family passing on. There are two types of life insurance: whole and term, so seek the advice of a financial expert to find out which is the right type for your situation.

Long-Term Disability

While health insurance covers your medical bills, you still have the cost of daily living to worry about if something happens to keep you from working for long periods or ever again. This is where long-term disability comes in. 

Many employers offer both long-term and short-term disability as part of their benefits package, but if yours doesn’t, you’ll want to purchase it on your own. The average cost of disability insurance is about 1-3 percent of your annual income, with factors like age, health, and lifestyle playing a role in the total cost.

Auto Insurance

Car accidents happen all the time. In fact, car accidents were the leading cause of death for people between the ages of 5 and 24 in 2018, according to the CDC. This fact alone should be enough to convince you that auto insurance is important. 

Not only does auto insurance protect your vehicle, but it also covers the other driver, their passengers, and their vehicle if the accident is deemed your fault. Not all states require you to have auto insurance, but most have regulations in place concerning the financial responsibility of the at-fault driver in a traffic accident. 

The bottom line is everyone needs health, life, long-term disability, and auto insurance. Insurance is expensive, but not having it can be much more financially devastating should something bad happen. 

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