5 Types of Insurance You Definitely Need

When we think of financial planning, we often focus on saving and investing our money. We all want to ensure a comfortable lifestyle in retirement. But it's equally important to protect what you already have, so that one event does not devastate you financially. Protecting your current assets will also help to protect your future, so remember that everyone needs the following five types of insurance.

Auto Insurance. In most states drivers are required to carry at least basic liability insurance on their vehicles. If you owe money on your car, you're also required to carry full coverage auto insurance, so that the value of your vehicle is protected. But it's also a good idea to make sure you're carrying enough insurance. If you are found at fault for an accident, the legal ramifications from a lawsuit could be devastating. It's better to make sure your auto insurance is adequate to cover your potential liabilities.

Homeowners Insurance. Your mortgage company requires you to carry homeowners insurance. But once you've paid off your home, you may be tempted to drop the policy. This is almost always a very risky plan. The small monthly premiums you pay to your insurance provider mean that one of your biggest, lifelong investments is covered in the event of a disaster. Keep in mind that most homeowners insurance policies also cover contents, which would need to be replaced in the event of a fire or flood.

Health Insurance. Your health is probably more important to your overall financial picture than you think. Staying in good health means you can work and provide for your family, while poor health often translates into high medical bills. Health insurance plans cover many forms of preventive care, which can save you money in the long run. If your job doesn't provide a group health insurance plan, purchase your own plan through the state-run exchange.

Disability Insurance. Since your ability to work is key to your financial future, it's important to protect yourself from a sudden disability. This type of insurance will provide money for your living expenses if you are ever disabled by an accident or illness, so that you won't have to raid your retirement savings. This type of insurance is especially important if you're the primary breadwinner in your family.

Life Insurance. In the event of your untimely death, your spouse and children will face expenses such as burial costs, debts, medical bills, and legal fees. Life insurance provides benefits almost immediately, so that your family is protected from financial hardship. 
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​This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional.  The statements and opinions expressed are those of the author and are subject to change at any time.  All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only.  It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.