��Ѩ��Ƶ

While health insurance has become increasingly complicated over the last few years, it’s essential. An unexpected medical event can cause severe financial issues and even lead to potential bankruptcy. And as inflation rises, so do medical expenses, with a significant uptick of 3.1% in January 2023.¹ Having a health insurance plan in place can not only protect you from potential financial loss due to an emergency, but it can also save you money on routine checkups.

There are many forms of life insurance, but the most basic and least expensive is term life insurance. This pays beneficiaries a specific amount of money if you die within the time period set in the policy.

In contrast to term insurance, there’s also permanent life insurance, which is designed to last for as long as you live, provided you continually make the premium payments.

Individuals should purchase life insurance based on their specific needs. For instance, someone with minors might need to purchase a higher amount of coverage to help ensure their children’s upbringing costs are covered in the event of their death.

Disability insurance replaces a portion of your salary if you became temporarily or permanently disabled. While you might not think it’s important to consider, around 25% of today’s young workers will become disabled before the age of 67.² Meanwhile, 35% of the private sector workforce has no disability insurance policy in place.² There are a lot of nuances to this type of insurance regarding when you’d be able to receive compensation and under what circumstances. Make sure you’ve done your due diligence prior to purchasing.

As many as 70% of people aged 65 and older will need some kind of long-term care in their life.³ Yet, the average annual cost of a private room in a nursing home in the United States is $108,405 and is expected to jump to $141,444 by 2030.⁴ Will you be able to afford this? Long-term care insurance is intended to help cover the cost of care received for home care, or in facilities like assisted living and nursing homes. When deciding between policies, look at the assets you have outside the insurance that could possibly pay for your care. Of course, you don’t want long-term care expenses eating into your retirement funds.

Your home might be the biggest purchase you’ll ever make – don’t you want to protect it? Homeowners insurance pays for damage to your house and often provides the necessary funds for temporary accommodations while your home is being repaired. A homeowners policy will be required while you have a mortgage, but it’s still important to maintain once your home is paid for.

This coverage extends the liability protection provided on your “underlying policies,” like homeowners and auto insurance. You can purchase additional coverage in million-dollar increments.

Approximately 5.25 million car crashes occur in the U.S. each year, according to recent data.⁵ Accidents happen, and it’s crucial to have car insurance for when they do. Beyond just collision coverage for your vehicle, auto insurance should also pay for the other party’s damage in the event of an accident for which you’re found to be at fault.

When you’re buying a house, if your down payment is less than 5% (sometimes, less than 20%), you’ll often be required to purchase private mortgage insurance. If you fail to make your payments, the policy pays it off – but it pays the lender to protect it against risks, not you or your family. Even when you’re paying your mortgage on time, the PMI premium payments, which can cost hundreds of dollars per month, can be a drain on your wallet. Once you have 20% equity paid into your home, ask your lender to cancel this insurance.

If you die, this policy pays off your remaining mortgage balance. Unfortunately, the money goes to your lender, not your surviving family. The premiums are also high. Consider replacing this policy with a term life policy and name your spouse or children as the beneficiary.

You might think you’ve never bought a flight insurance policy when you purchased an airline ticket, but check with your credit card company. Some flights automatically bill you for the coverage when you buy a plane ticket. Even without this coverage, if you die in an accident, the airline is likely to compensate your family regardless of this additional cost. But that’s not the point. Your life insurance policy should have enough coverage to provide for your family no matter your cause of death.

Unless your life is a Buster Keaton physical comedy, a deadly accident isn’t likely. Your home, life and auto insurance coverage should already protect you and your family from a financial loss due to a catastrophe like a car accident or fire; so your family likely doesn’t need more money because you die in an accident instead of an illness. And that’s not to mention the difficulty of proving that you died of an accident – and not a heart attack from stress following the accident.

Even if you have a family history of diseases, insurance policies designed to cover specific things, like cancer or heart disease, are rarely worth the extra costs in premiums. Similar to the above, you’ll want life and health insurance that pays, regardless of the diagnosis.

If you die, this insurance pays off your credit cards. While this might sound like a good thing to do for any surviving family members, credit insurance is extremely expensive and not recommended. Besides, you’re not supposed to carry balances from month to month. Even if you do, cards in your name don’t automatically become the obligation of your survivors. And if you fear they’ll become their obligation, get term life insurance, which is less expensive.

Don’t buy a separate policy for each child. Instead, add a child rider to your own life insurance policies. For about $25 per year, you’ll get enough to cover final expenses. Also, don’t buy life insurance as a means of saving for college. Instead, establish a 529 college savings plan.