Financial Savvy: 4 Types Of Insurance Every Adult Should Have

by | Mar 3, 2021 | Financial Featured

Insurance For Everything: 4 Policies To Consider

What types of insurance do you need to have? This is a big question, and one that doesn’t always have precise answers – in fact, as many young adults who are trying to make sense of their finances and responsibilities have discovered, you’re likely to get different answers depending on who you ask. Despite this general imprecision, however, there are a few policies that experts view as critical. Whether you’re a young person who is still getting established or an older adult who is still feeling uncertain, these four insurance policies represent the ideal starting place.

Health Insurance

Of all the different types of insurance that exist, health insurance is one of the only ones that might be considered non-negotiable, even though millions of Americans remain uninsured. That being said, failure to maintain health insurance coverage comes with a tax penalty, which is why it’s important to save money to buy health insurance if you can’t receive it through your job and aren’t old enough for Medicare. Alternatively, if you don’t think you can afford insurance, make sure to check whether you qualify for the Medicare expansion, which is available in many states.

Homeowners Or Renters Insurance

If you own your own home, then you also need to have a homeowners insurance policy, but not all policies are created equal. That’s why it’s important to reach out to the companies that provide policies in your area to get homeowners insurance quotes and ask questions about what different policies cover. You want to make an informed decision based on your needs, not just choose the lowest-priced policy.

As for those who don’t own their own homes, you’re not out of the woods. Tenants should have renters insurance to protect their possessions regardless of where they live. Not all landlords and property owners require such policies, but having one can be beneficial if you experience a break-in or other problem.

Auto Insurance

Much like homeowners insurance, if you own a car, you need to have auto insurance – in fact, you’re legally required to. The only major variable the amount of coverage, since you typically have options if your car is fully paid off. As long as your car is in reasonably good shape, though, it’s generally wise to have more than just liability insurance. The goal should be to have enough insurance that you’re confident you can afford a new vehicle if yours is totaled in an accident.

Pet Insurance

Pet insurance may not be mandatory, but if you’re going to own a pet – and most millennials today are devoted pet owners – it’s a worthwhile investment. Why? While pet insurance doesn’t cover preventative care the way your health insurance does, it’s generally inexpensive if purchased when your pet is young and covers a wide range of later health issues and emergencies. Given that surgery can cost thousands of dollars and ongoing care for a chronic illness can become expensive, thirty dollars seems like a fair price for peace of mind.

These four insurance policies are just scratching the surface when it comes to the types of coverage available today, but they represent a good and necessary start if you’re on a limited budget. Once you’ve covered the bases, you can budget for additional coverage from there as it suits your needs. For now, though, the best way to start is by building a strong foundation.

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