July 5, 2022
insurance agents vs insurance brokers

Four Insurance Policies Everyone Should Have

Having suitable insurance coverage is one of the best ways to mitigate risk in today’s hectic world, and some types are more important than others. Learn about four must-have insurance policies that everyone should consider below.

1. Life Insurance

Regardless of your age, your health, and other factors, life insurance is something you shouldn’t go without. Some of the main reasons to invest in this type of coverage as soon as possible include:
  • It’s Cheaper Than You Think – People often assume that this coverage is too pricey or complicated for them. In reality, this type of insurance is quite affordable, and lining it up is straightforward. A healthy 30-year-old can get a 20-year term life policy worth $250,000 for around $13 per month, so it’s an accessible option for most.
  • It’s a Crucial Part of Financial Planning – If you have your financial situation planned out but don’t have this type of coverage, you stand to lose a lot. The right policy can provide financial protection to your loved ones after you die, providing funds for funeral expenses, daily living expenses, college and more.
  • It Can Build Value Over Time – Permanent life insurance policies build a cash value, or cash-surrender value, over time. You can use this cash for anything, and it can accrue on a tax-deferred basis. Lending rates tend to be low, and credit checks and other red tape aren’t required.
  • It Can Offer Much More – You can customize this type of policy with riders to make it even more beneficial. For example, a hybrid policy can provide a long-term care benefit should you require it. If you don’t use it, it reverts to a death benefit for your beneficiaries.
  • It Can Maximize Your Retirement Savings – When designed properly, a life policy can also provide supplemental retirement income via long-term care benefits, withdrawals, and policy loans. You may be able to establish a trust that can be passed on to your heirs outside of your estate, helping you avoid estate and income taxes.

2. Auto Insurance

  • It’s Required By Law – Car insurance is required by law in all but two states – Virginia and New Hampshire. If you’re involved in an accident and don’t have coverage, you could face civil liabilities, court fines and other costs that could potentially bankrupt you.
  • It’s Flexible – These days, you can pick and choose from various options to create automobile coverage that truly suits your needs. Your agent can help you adjust limits and deductibles to help you achieve the right amount of protection. You can choose from a flexible array of options, from accidental death riders to uninsured and underinsured motorist coverage.
  • It Ensures Reliable Transportation – Like most people, you probably rely on your car to get around every day. Auto insurance typically includes coverage for car rentals in the event that your vehicle ends up in the shop, so it can help you avoid the headache of being without wheels.
  • It Gives You Peace of Mind – Finally, auto insurance helps to protect one of your most valuable assets, giving you peace of mind. With this type of coverage, you are protected against most lawsuits stemming from car accidents and the like – even if you are at fault.

3. Home or Property Insurance

  • Lenders Often Require It – If you have a mortgage on your home, your lender more than likely requires you to carry homeowner's insurance. After all, the lender will be in hot water if something happens to the house since it serves as the collateral for the loan.
  • It Protects You from Natural Disasters – Even if you take excellent care of your home, there’s no accounting for acts of God. A homeowner’s policy can protect your house from damages incurred from wind, fire, storms and even flooding.
  • It’s the Best Way to Protect Your Investment – If your home becomes uninhabitable or is destroyed, your home insurance will cover the cost to rebuild it. Many policies also protect belongings inside the home and other structures across the property. In the aftermath of an event like a fire that destroys your home and belongings, the last thing you want to worry about is finding a way to pay to replace everything, so homeowner’s insurance is truly crucial.
  • It Protects You from Lawsuits – Your homeowner’s policy will also protect you in the event that someone is injured while on your property. Without this type of coverage, you could be subject to lawsuits that could quickly drain your bank accounts. Just defending yourself in such a lawsuit is expensive, and this type of coverage can help you avoid these problems.

4. Umbrella Insurance

  • It Covers the Entire Household – This type of policy covers the policyholder and their family or household. Therefore, if anyone in your home is liable in a car accident or other event and existing policies don’t cover damages, an umbrella policy will make up for the difference.
  • It Covers Injuries to Others and Damages to Their Possessions – Medical expenses tend to be exorbitant. If someone is injured and your existing coverage doesn’t cover the full cost, an umbrella policy can pay for the difference. Likewise, this type of coverage protects other people’s possessions, too. If your car insurance falls short of covering damages to another person’s car, for example, umbrella coverage can be used for the rest.
  • It Minimizes Overall Risk – This type of coverage is called an “umbrella” because it protects you in so many situations. Insurance claims of all kinds can be very expensive; even if you’re careful to get coverage for your home, car, and other types of personal liability, a single event can blow past all of your minimums quickly.
  • It’s Very Affordable – Since other insurance types take precedence for personal liability, umbrella coverage is very affordable. You can get a $1 million policy for an average of $150 to $300 per year, so it’s an affordable way to greatly increase your peace of mind.

Get the Coverage You Need Today

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John Espenschied is a long-time veteran of the insurance industry. He's worked with thousands of clients over the years, helping to protect their personal and business needs. John's goal is to provide the best advice possible to assist customers in saving money while protecting their property and securing their financial future.
He truly enjoys helping others and takes great satisfaction in providing top-notch customer service. When he's not working, John has fun spending time with his family, golfing, bike riding, and blogging on insurance topics.