We cannot stop unfortunate events from occurring. However, we can financially protect ourselves against these events when they happen. That is how insurance policies are designed.
A vast number of insurance policies are available on the market. Each of these financially safeguards you from the event that the specific insurance plan targets. Medicaid plans, for example, are to be used to help out with medical expenditures in case of sickness or injury.
Types of Insurance You Need to Protect Yourself
All insurers try to convince us of the merits of their particular product. The deluge of information makes it difficult for customers to decide which policies are essential. While all insurance types can be potentially helpful like Medicaid plans, some plans are more useful than others. There are other types that we can realistically live without.
Here are eight types of insurance that you need to know about:
1. Life insurance
Life insurance is one of the most common types that people get. Here, the insurance company releases the proceeds of the insurance in the event of the policyholder’s death. The money is released to the policyholder’s beneficiaries or dependents and may be used for a variety of purposes. These can include funeral expenses, paying off debts, and giving the deceased’s family funds for other expenses.
Life insurance may be term life insurance or traditional whole life policy. The former has the holder pay for a set amount of time. The latter has payments for the holder’s entire life as long as the policy is maintained.
Many agree that the best age to get life insurance is under 35 years of age. Younger ages are usually better since insurance costs increase every year. Here are some of the other things to note about life insurance:
- Life insurance is beneficial for people with children and other dependents.
- Life insurance can be used to cover debts.
- You can purchase life insurance for minors. They can maintain this policy later on in life, depending on the terms of the policy.
Most people will benefit from life insurance. This is especially true for those who worry about their family’s financial security should they be left behind.
2. Health insurance
Nearly everyone can benefit from health insurance. These are used for covering medical expenses due to injuries, accidents, and illnesses.
The coverage that health insurance can have depends on the policyholder’s preferences. Some policies, usually the lower-costing ones, may have limited coverage. More expensive policies can cover more medical conditions and offer a broader range of services.
More expensive does not always mean better services, however. Try to assess the type of policies that you need. If you are predisposed to a certain disease, for example, get coverage for that disease.
3. Disability insurance
As the name implies, this type of insurance will provide the policyholder with funds in case of a disability. This especially applies if the policyholder cannot work due to the incident. It also works well with Medicaid plans. All disability insurance policies must be in place before the disability occurs for the policyholder to gain the benefits.
Disability insurance can either be a short term or a long term policy. A short term policy will offer funds in place of a salary in the case of missed workdays. However, it is usually only applicable for missed days under six months.
Meanwhile, a long term policy will cover anything above six months. The policyholder must also be aware of the elimination period. If the holder can return to work during the elimination period, no benefits will be given.
Disability insurance is particularly useful for:
- Family breadwinners
- Those that work in high-risk jobs
- Those that work specialized jobs
Not everyone will benefit from disability insurance. Medicaid plans, for example, will sometimes be enough to cover the minor medical expenses. Try to assess your current lifestyle and means of living before you decide on getting a disability policy.
4. Umbrella insurance
Umbrella insurance can be seen as an extension of liability insurance. Liability insurance protects the policyholder from liability claims related to property damage and human injury.
An umbrella insurance policy is an extra safeguard in case that the liability insurance fund is exhausted by an event. It also covers other factors that liability insurance cannot. An umbrella insurance policy is particularly useful for the following:
- Those that hold many assets
- Those that are at risk of facing court charges
- Those with high-valued assets.
Generally, people that work jobs that are at risk of lawsuits will benefit the most from liability and umbrella insurance.
5. Homeowners insurance
Homeowners insurance will cover expenses in case the policyholder’s home is damaged or destroyed. It may also sometimes cover accidents and other events that occur within the policyholder’s property. This insurance has a limit, which is the maximum amount of coverage. However, the following incidents can be accounted for by the insurance:
- Damage to the home’s exterior and interior
- Damaged or lost property
- Injuries within the property, which can be used with Medicaid plans
All homeowners, especially those in accident-prone areas, should consider purchasing homeowners insurance.
6. Auto insurance
Auto insurance, also known as vehicle insurance, covers expenses related to vehicular accidents. In particular, some of the most essential expenses covered by this are:
- Medical expenses from accidents
- Expenses due to damage or physical repairs
- Liabilities and lawsuits due to the accident
All vehicle owners should have some form of auto insurance. Auto insurance is even a requirement in many places.
7. Education insurance
Education insurance should be an option for couples with children. This type of insurance will provide the policyholder with funds for education, mostly used for college or university.
Consider getting an education insurance policy for your kids to ensure enough funds for their future. It is all the more crucial since education costs are continually rising with every year that passes. Make sure your children have enough funds for the future.
8. Travel insurance
You may already be familiar with travel insurance if you have purchased airline tickets before. Travel insurance covers some unforeseen expenses that occur while traveling. These expenses may vary depending on the insurance company in question. Some of the most notable ones covered, however, are the following:
- Trip cancellation
- Loss or damage to personal items and luggage
- Lost travel documents and passports
- Flight rebooking
- Medical expenses
You may want to get travel insurance for your trip if you are sickly or are elderly. Also, consider getting a travel insurance package if you are traveling to a country that isn’t very safe. Take note that Medicaid plans do not always cover you while abroad, so consider getting travel insurance.