Insurance that You Need (and some that you don't)

Health insurance is one of the most important financial tools you can have—but it’s also one of the most confusing. Between all the unfamiliar terms, different plan types, and rising costs, many people feel overwhelmed before they even begin. If that sounds like you, you’re not alone.

The good news? You don’t have to know everything. You just need to understand the basics—and that’s exactly what this guide will help you do. We’ll break it all down in simple terms so you can make smart choices and feel confident about your coverage.

What Is Health Insurance?

Health insurance is a type of plan that helps pay for your medical care. Instead of paying the full cost of a doctor’s visit or hospital stay out of pocket, your health insurance company covers part (or most) of the bill. In return, you pay a monthly fee called a premium.

You can use health insurance for things like checkups, medications, emergency care, and surgery. It also helps protect you from big, unexpected medical bills that could leave you in debt.

Key Terms to Know:

• Premium: What you pay each month to keep your insurance active—even if you don’t use it
• Deductible: The amount you have to pay each year before your insurance starts paying its share
• Copay: A small set fee you pay for certain services (like $25 for a doctor visit)
• Coinsurance: After you meet your deductible, this is the percentage you still owe for care (for example, you pay 20%, insurance pays 80%)
• Out-of-Pocket Maximum: The most you’ll have to pay in a year. After that, insurance covers everything
• Network: The list of doctors, hospitals, and clinics your insurance plan works with

Why Do You Need Health Insurance?

Even if you’re healthy now, health insurance is something every adult needs. Here’s why:

• Accidents and illness can happen anytime—a broken bone or emergency room visit can cost thousands
• Without insurance, you pay full price—which is often much higher than the rates insurers negotiate
• Health insurance helps you stay healthy—checkups, vaccines, and screenings are usually free with most plans
• It protects your money—medical debt is one of the top causes of bankruptcy in the U.S.
• Some places require it—in certain states, you can be fined if you don’t have coverage

Think of health insurance like a safety net. You might not need it every day, but when you do, it can make all the difference.

What Does Health Insurance Usually Cover?

While plans can vary, most cover these basics:

• Doctor visits (including specialists)
• Emergency room care
• Hospital stays and surgery
• Prescription medications
• Lab tests and X-rays
• Mental health and addiction treatment
• Maternity and newborn care
• Preventive care (like checkups, cancer screenings, and vaccines)

Some plans may also offer extras like:

• Vision and dental (more common in employer plans)
• Virtual visits (telehealth)
• Wellness programs and discounts

What Health Insurance Doesn’t Cover (or Limits You Should Know About)

Not everything is covered, and that can surprise people. Common exclusions include:

• Elective cosmetic surgery (like Botox or plastic surgery not related to injury)
• Non-emergency care at out-of-network providers
• Some alternative treatments (acupuncture, massage, etc.)
• Long-term care (nursing homes, assisted living)
• Unapproved medications or experimental treatments

Always read the “Summary of Benefits” document before picking a plan. It outlines what’s covered and what’s not.

How Much Coverage Do You Need?

This depends on your personal health and finances. Ask yourself:

• Do you go to the doctor often or take regular medication?
• Do you have a chronic illness (like diabetes or asthma)?
• Can you afford to pay several thousand dollars if you get hurt or sick?
• Do you want low monthly costs, or low out-of-pocket costs when you need care?

General Tips:

• If you’re young and healthy: You might choose a plan with a higher deductible and lower monthly premium.
• If you have health issues: A plan with a higher monthly cost but lower copays and deductibles might save you money in the long run.

How Much Does Health Insurance Cost?

It depends on the plan, where you live, your age, and whether your job helps pay for it.

Typical ranges:

• Monthly premiums: $200–$600 per person (more for family plans)
• Deductibles: $1,500 to $7,500 per year
• Copays: $15–$50 for most doctor visits

Many people qualify for help through government subsidies or employer contributions, which can make coverage much more affordable.

How to Get Health Insurance

If You Have a Job That Offers Insurance:

• Sign up for your employer’s plan during open enrollment or when you start working
• Your employer usually pays part of your premium, making it a good deal

If You’re Self-Employed or Don’t Have Job-Based Coverage:

• Go to HealthCare.gov or your state’s health insurance marketplace
• You may qualify for subsidies based on your income

If Your Income Is Low:

• You may qualify for Medicaid, a free or low-cost government program

What to Compare When Choosing a Plan:

• Monthly premium vs. deductible
• Doctors and hospitals in the plan’s network
• Prescription coverage
• Out-of-pocket max (how much you could pay in a worst-case scenario)

When to Review or Change Your Plan

• Open enrollment happens once a year (usually in the fall)
• You can also change plans if you have a major life event (marriage, job loss, baby, etc.)
• Review your plan every year—costs and coverage can change

Smart Tips and Mistakes to Avoid

Do:

• Use free preventive care—like checkups and screenings
• Double check that doctors are in your network before making appointments
• Go to urgent care (not the ER) for non-life-threatening issues
• Ask your pharmacy about generic drugs—they’re usually much cheaper

Don’t:

• Pick the cheapest plan without checking the deductible
• Ignore plan documents—take a few minutes to read what’s covered
• Forget to cancel old plans if you switch jobs or providers

Bottom Line

Health insurance can be confusing—but it’s also one of the smartest ways to protect your health and your finances. It helps cover the cost of care, gives you access to regular medical services, and shields you from unexpected bills that could derail your savings.

Whether you get coverage through your job, the marketplace, or a government program, make sure you have a plan that fits your needs and budget. You don’t have to know it all—you just have to take the first step.

If you drive a car, you need auto insurance—plain and simple. Not only is it required by law in most states, but it’s also one of the best ways to protect yourself financially if something goes wrong on the road. And let’s be honest—accidents happen. Even careful drivers can get caught in a fender bender or face unexpected damage from weather, theft, or vandalism.

In this guide, we’ll break down what auto insurance actually covers, why it’s so important, and how to pick a policy that fits your needs and budget.

What Is Auto Insurance?

Auto insurance is a contract between you and an insurance company that protects you financially in the event of a car accident, theft, or other damage to your vehicle. In exchange for paying a monthly or yearly premium, your insurance provider agrees to help cover repair costs, medical bills, or property damage.

Key Terms to Know:

• Premium: The amount you pay (monthly or annually) to maintain your coverage
• Deductible: What you pay out of pocket before your insurance starts to pay
• Liability coverage: Covers damage you cause to others (both people and property)
• Collision coverage: Covers damage to your car from accidents, regardless of who’s at fault
• Comprehensive coverage: Covers non-accident-related damage (like theft, weather, or hitting a deer)
• Uninsured/underinsured motorist coverage: Helps if the other driver doesn’t have enough insurance

Why Do You Need Auto Insurance?

There are three big reasons why auto insurance isn’t optional:

1. It’s legally required in nearly every state. Driving without it can lead to fines, license suspension, or even jail time.
2. It protects you financially from massive bills if you’re in an accident. The cost of medical care, car repairs, or legal fees can be crushing without coverage.
3. It covers others too. If you cause an accident, your insurance helps pay for the damage or injuries you cause—so you’re not stuck paying out of pocket.

Even if you’re a great driver, you can’t control other people, road conditions, or unpredictable events like hailstorms or car theft.

What Does Auto Insurance Typically Cover?

There are several different parts to an auto insurance policy. Here’s what most plans include:

• Liability coverage (required in most states): Pays for injuries or damage you cause to others
• Collision coverage: Pays for damage to your vehicle from an accident
• Comprehensive coverage: Covers non-collision damage like fire, theft, vandalism, falling objects, or weather
• Medical payments or Personal Injury Protection (PIP): Covers medical bills for you and your passengers
• Uninsured/underinsured motorist coverage: Helps if you’re hit by someone with little or no insurance

Some add-on options include:

• Roadside assistance (for towing, flat tires, etc.)
• Rental car reimbursement
• Gap insurance (covers the “gap” between what your car is worth and what you owe on a loan)

What Isn’t Covered?

While auto insurance covers a lot, there are limits. Here are some common exclusions:

• Mechanical breakdowns (unless caused by an accident)
• Routine maintenance (like oil changes or brake replacements)
• Personal belongings stolen from your car (your renters or homeowners insurance may cover this)
• Driving for work (Uber, DoorDash, etc.) without special commercial coverage
• Racing or reckless driving

Always read your policy and ask your agent if you’re unsure what’s covered.

How Much Coverage Do You Need?

The amount of coverage you need depends on your state’s minimum requirements and your personal situation. Here’s what to consider:

• Your state laws: Start by knowing what’s legally required
• Your car’s value: If your car is newer or more expensive, comprehensive and collision coverage are worth it
• Your assets: If you have savings or property, higher liability limits help protect them if you’re sued
• Your risk level: Commute daily? Drive in heavy traffic? More coverage is safer

General Recommendations:

• Liability limits of at least 100/300/100 (that’s $100k per person, $300k per accident for injuries, and $100k for property damage)
• Comprehensive and collision coverage for cars less than 8–10 years old
• Uninsured motorist coverage, especially if you live in a state with lots of uninsured drivers

How Much Does Auto Insurance Cost?

Costs vary based on many factors, including your age, driving history, location, type of car, and credit score (in most states).

Average Costs:

• Premiums: $100–$200/month for full coverage
• Deductibles: Common choices are $500 or $1,000

Factors That Affect Cost:

• Your driving record (tickets and accidents will raise your rates)
• How much you drive
• Where you live
• Your age and gender
• Type of car you drive
• Your insurance history

You can often lower your premium by:

• Bundling with renters or homeowners insurance
• Maintaining a clean driving record
• Increasing your deductible
• Using apps or devices that track safe driving habits

How to Get Auto Insurance

You can buy auto insurance:

• Directly from an insurance company (like GEICO, Progressive, or State Farm)
• Through an independent agent who compares multiple companies for you
• Online comparison websites

What to Compare:

• Coverage limits and what’s included
• Deductibles and out-of-pocket costs
• Customer service and claims reviews
• Discounts available (safe driver, good student, bundling, etc.)

Before you buy, get at least three quotes to compare prices and coverage.

When to Review or Change Your Coverage

• After buying a new car
• When moving to a new state or city
• After a major life change (marriage, divorce, adding a teen driver)
• If your rates go up
• Every 12 months to compare quotes

Smart Tips and Mistakes to Avoid

Do:

• Always carry proof of insurance in your car
• Ask about available discounts
• Review your policy annually
• Take photos and gather details if you’re in an accident

Don’t:

• Let your policy lapse (it can raise your rates later)
• Assume state minimum coverage is enough
• Forget to read the fine print about what’s not covered

Bottom Line

Auto insurance isn’t just a legal requirement—it’s a critical part of protecting yourself and your finances. It helps pay for damages, medical bills, and legal costs that can come with accidents and other car-related issues.

Make sure your policy fits your life. Understand what it covers, how much it costs, and when to update it. A good policy brings peace of mind every time you hit the road.

Life insurance is one of those financial tools that feels easy to ignore—especially when you're young and healthy. But if anyone relies on your income (or would have to cover your debts or final expenses), life insurance becomes more than just a “nice-to-have.” It’s a smart and compassionate way to protect the people you love.

This guide breaks down what life insurance is, who needs it, how much you should get, and how to choose a policy that makes sense for your life—not someone else’s.

What Is Life Insurance?

Life insurance is a contract between you and an insurance company. You pay a regular premium (monthly or annually), and in return, the insurer promises to pay a lump sum (called a death benefit) to your chosen beneficiary if you pass away while the policy is active.

That money can be used by your loved ones to pay for anything—mortgage payments, everyday bills, childcare, debt, college tuition, or funeral costs.

Key Terms to Know:

• Premium: What you pay to keep the policy active
• Death benefit: The amount of money your beneficiaries receive if you die
• Beneficiary: The person (or people) who will receive the death benefit

Types of Life Insurance: Term vs. Whole vs. Universal

There are several types of life insurance, but the most common fall into two main categories: term life and permanent life insurance (which includes whole and universal life). Here's what makes each one unique—and how to know which may be right for you:

Term Life Insurance

Term life insurance is straightforward. You pick a coverage amount (like $500,000) and a time period (usually 10, 20, or 30 years). If you pass away during that term, your beneficiaries receive the death benefit. If you outlive the term, the coverage ends and nothing is paid out.

• Affordable premiums: A 30-year-old might pay just $25/month for $500,000 in coverage
• No savings or investment feature—just life insurance
• Fixed payments: Your premium stays the same during the term

This is a great option for most people who want protection during the years when they’re raising a family, paying off a mortgage, or building financial security.

Whole Life Insurance

Whole life insurance offers coverage for your entire lifetime as long as you continue to pay the premiums. It also includes a cash value component that grows slowly over time.

• More expensive: Often 5–15x the cost of term insurance
• Cash value grows at a guaranteed rate and you can borrow from it while you're alive
• Fixed premiums that never change

Some people use whole life insurance as a forced savings tool, but it’s usually best for those with long-term estate planning goals or high incomes who have already maxed out other savings options.

Universal Life Insurance

Universal life insurance is a flexible version of permanent life insurance. It also includes lifelong coverage and a cash value, but with more control over your payments and death benefit.

• Flexible premiums: You can pay more or less into the policy over time, within certain limits
• Cash value can grow based on interest rates or market indexes, depending on the policy
• Can adjust your death benefit (with approval from the insurer)

While more complex, universal life insurance can work well for people who want permanent coverage with flexibility—or for business owners and high earners looking to manage long-term tax strategies.

Why Do You Need Life Insurance?

Not everyone needs life insurance—but many people do and don’t realize it. You should seriously consider it if:

• You have dependents (like kids or a partner who relies on your income)
• You share debt (like a mortgage or joint credit card)
• You want to leave money for final expenses (funerals often cost $7,000+)
• You want to leave a financial legacy (for education or charitable giving)

Even if you’re young and single, a small policy can help cover final expenses or any co-signed loans, so your family isn’t left with the burden.

What Does Life Insurance Typically Cover?

The death benefit can be used for any purpose, but it’s commonly used to cover:

• Funeral and burial costs
• Mortgage or rent
• Childcare and education expenses
• Lost income for the surviving spouse or partner
• Outstanding debts and credit card balances
• Taxes or estate-related expenses

Life insurance is paid out as a lump sum and is usually tax-free to the beneficiary.

What It Doesn’t Cover (or Limitations to Know)

Life insurance won’t pay out in some cases, including:

• If the policy has lapsed due to nonpayment
• Fraud or lying on the application (e.g., hiding health issues)
• Death from suicide within the first two years of a new policy (most policies have a waiting period)
• Death during high-risk activities not covered (like skydiving, if excluded)

Also, some policies have waiting periods before the full benefit is active. Read your policy carefully.

How Much Life Insurance Do You Need?

A general rule of thumb is to get 10 to 15 times your annual income in coverage. But it depends on your situation.

Ask yourself:

• How much money would your family need to maintain their lifestyle?
• Do you have a mortgage or other large debts?
• How many years would your dependents need support?
• Will you need to cover future costs like college or elder care?

Many people underestimate how much their family would need. It’s better to overestimate than to fall short.

How Much Does Life Insurance Cost?

Life insurance is more affordable than many people think—especially if you’re young and healthy.

Average Costs:

• A healthy 30-year-old can get a $500,000 20-year term policy for around $20–30/month
• Whole life insurance costs more—often 5 to 15 times the price of term policies

What Affects Cost:

• Age
• Health and medical history
• Smoking status
• Term length and coverage amount
• Type of policy (term vs. whole)

How to Get Life Insurance

You can get life insurance:

• Through your employer (usually a small policy, and it ends when you leave the job)
• From an insurance agent or broker
• Online from companies like Haven Life, Ladder, or Ethos

What to Compare:

• Term length and coverage amount
• Monthly premium
• Whether you need a medical exam or can apply online
• Company reputation and customer service

It’s smart to get quotes from at least two or three providers to compare.

When to Review or Update Your Policy

Life changes—so your life insurance needs might too. Review your policy:

• After getting married or divorced
• When you have a child
• When you buy a house or take on major debt
• If your income or expenses change significantly
• Every few years, just to make sure your coverage still fits

Smart Tips and Common Mistakes to Avoid

Do:

• Get coverage while you're young—it’s cheaper
• Choose a policy that lasts until your kids are grown or debt is paid off
• Be honest on your application
• Name both a primary and contingent (backup) beneficiary

Don’t:

• Wait too long—rates go up every year you age
• Forget to update your policy after major life changes
• Confuse your employer-provided policy for full protection—it’s usually not enough
• Buy more coverage than you need with expensive permanent life insurance (unless you’ve done the math)

Bottom Line

Life insurance is one of the simplest ways to protect your loved ones from financial hardship. If someone depends on you, a policy can give you peace of mind knowing they’ll be taken care of no matter what.

Start with an affordable term policy, lock in a good rate while you’re young, and revisit your needs as life changes. It’s a small step that can make a big difference in someone else’s life when they need it most.

Whether you own your home or rent it, your living space is likely one of your biggest investments—and the place that holds most of your belongings. That’s why homeowners and renters insurance are so important. They’re not just about protecting walls and furniture—they’re about protecting your financial future when the unexpected happens.

This guide breaks down the difference between homeowners and renters insurance, what they cover, why you need them, and how to choose the right policy for your life.

What Is Homeowners Insurance?

Homeowners insurance is a policy that protects people who own their home. It covers your house (the structure itself), your belongings, and your liability if someone is hurt on your property.

You pay a monthly or annual premium, and in exchange, the insurance company helps pay for losses or damage due to things like fire, theft, storms, or accidents.

Key Things It Covers:

• Dwelling coverage: Pays to repair or rebuild your home if it’s damaged by a covered event
• Personal property: Covers furniture, clothing, electronics, etc. if stolen or destroyed
• Liability protection: Covers legal and medical costs if someone is injured on your property
• Loss of use: Pays for temporary housing if your home is uninhabitable after a disaster

What Is Renters Insurance?

Renters insurance is for people who rent their home or apartment. It doesn’t cover the building itself (that’s your landlord’s job), but it protects your stuff inside—and your liability if someone gets hurt while visiting.

Renters insurance is affordable and often overlooked. But if your apartment burns down or your things are stolen, it can be a lifesaver.

Key Things It Covers:

• Personal property: Furniture, electronics, clothing, and more
• Liability protection: If someone is injured in your rented space or you accidentally damage someone else’s property
• Loss of use: Helps pay for hotel or rental costs if you can’t live in your place due to damage

Why You Need It

For Homeowners:

• Your home is likely your most valuable asset—repairing or rebuilding can cost hundreds of thousands of dollars
• Most mortgage lenders require you to have coverage
• It protects not just the house, but your belongings and financial liability

For Renters:

• Your landlord’s insurance won’t cover your personal items
• Renters insurance is usually less than $20/month and can protect thousands of dollars in property
• It gives you a place to stay and support in disasters like fires, leaks, or theft

What These Policies Don’t Cover

• Floods and earthquakes (you’ll need separate policies for these in most cases)
• Normal wear and tear (insurance isn’t a maintenance plan)
• Intentional damage or illegal activity
• High-value items beyond your personal property limit (you may need extra riders for jewelry, art, collectibles, etc.)

Always check your policy’s exclusions and ask questions before you buy.

How Much Coverage Do You Need?

Homeowners:

• Enough dwelling coverage to completely rebuild your home if it were destroyed
• Personal property coverage equal to the value of all your belongings
• Liability protection of at least $300,000, especially if you have guests, pets, or a pool

Renters:

• Add up the value of your stuff—don’t underestimate how much your clothes, electronics, and furniture are worth
• Choose a liability limit that covers potential medical bills or legal costs if someone is injured in your unit

How Much Do These Policies Cost?

Homeowners Insurance:

• Average: $100–$150/month (depends on home size, location, and value)
• May be included in your mortgage payment through an escrow account

Renters Insurance:

• Average: $10–$25/month
• Cheaper if bundled with auto or other policies

Factors that affect the price:

• Location (areas prone to natural disasters cost more)
• Home or apartment size and value
• Deductible amount (lower deductible = higher premium)
• Credit score and claims history

How to Get It

You can buy homeowners or renters insurance:

• Through major insurance companies (like State Farm, Allstate, or Lemonade)
• With help from an independent agent who compares rates for you
• Online or through an app for quick quotes

What to Look For:

• Clear coverage limits (especially for personal property)
• Affordable deductible amounts
• Good customer service and claims process
• Discounts for bundling with auto insurance

When to Review or Update Your Policy

• When you move or remodel your home
• After big purchases (new electronics, jewelry, furniture)
• Once a year during renewal to check for better deals or needed changes
• If you adopt a dog, add a pool, or host frequent guests (this may affect liability risk)

Tips and Common Mistakes to Avoid

Do:

• Keep a home inventory (photos or a list of your belongings)
• Ask about discounts (bundles, alarm systems, smoke detectors)
• Review your deductible—make sure you can afford it if something happens

Don’t:

• Assume your landlord’s insurance covers your stuff (it doesn’t)
• Underestimate how much your things are worth
• Forget to add coverage for valuables like jewelry or collectibles

Bottom Line

Homeowners and renters insurance are essential financial tools that protect your property and your peace of mind. Whether you own or rent, a single disaster could set you back thousands—or leave you without a place to live.

For a relatively low cost, you can protect your belongings, your living space, and your future. Don’t wait until something bad happens to get coverage—get peace of mind now.

Most people insure their home, car, and health—but overlook their ability to earn an income, which might be their most valuable asset. That’s where disability insurance comes in. If you become too sick or injured to work, disability insurance replaces a portion of your income so you can continue paying your bills and supporting your lifestyle.

This guide explains what disability insurance is, why you might need it (even if you're young and healthy), and how to choose the right type of policy.

What Is Disability Insurance?

Disability insurance provides income protection if you become physically or mentally unable to work due to illness, injury, or a medical condition. It’s often called “paycheck protection.”

You pay a monthly premium, and in return, the insurer pays you a benefit—typically 50% to 70% of your income—if you're unable to work for a covered reason.

Key Terms to Know:

• Benefit amount: The percentage of your income you'll receive while disabled
• Benefit period: How long you’ll receive payments (e.g., 2 years, 5 years, until age 65)
• Elimination period: The waiting time between when you're disabled and when benefits start (usually 30–180 days)
• Own occupation vs. any occupation: Whether you’re covered if you can’t do your specific job vs. any job

Why Do You Need Disability Insurance?

You might think disability insurance is only for people in high-risk jobs—but most disabilities are caused by illness, not accidents. Conditions like cancer, heart disease, or mental health issues are common reasons people can’t work.

Here’s why it matters:

• Your income powers everything—your rent, bills, savings, and retirement contributions
• Medical issues are unpredictable—1 in 4 working adults will become disabled before retirement age
• Savings might not last long—even a few months without income can create long-term financial damage

If you have a spouse, children, a mortgage, or any financial responsibility, this type of insurance helps keep your life stable if the unexpected happens.

Short-Term vs. Long-Term Disability Insurance

There are two main types of coverage:

Short-Term Disability (STD)

• Covers temporary conditions (like surgery recovery or pregnancy complications)
• Benefits usually last 3 to 6 months
• Elimination period: 0 to 14 days
• Often provided by employers as part of a benefits package

Long-Term Disability (LTD)

• Covers serious injuries or chronic illnesses that prevent you from working for months or years
• Benefit period: 2 years, 5 years, or until retirement age
• Elimination period: 60 to 180 days
• May be offered through work or purchased individually

If you can only get one, long-term disability coverage offers the most critical protection.

What Disability Insurance Typically Covers

Disability insurance can cover:

• Chronic illnesses (cancer, MS, arthritis)
• Injuries (from car accidents, falls, etc.)
• Recovery from surgery or medical complications
• Mental health issues (depression, anxiety)
• Pregnancy-related complications (mainly short-term policies)

What It Doesn’t Cover

Disability insurance does not cover:

• Injuries from illegal activity or self-harm
• Short-term minor illness like a cold or flu
• Pre-existing conditions (unless your policy allows them after a waiting period)
• Work-related injuries (covered under workers’ compensation, not disability insurance)

Always read the fine print—especially around pre-existing conditions and how your job duties are defined.

How Much Coverage Do You Need?

A good starting point is a policy that replaces at least 60% of your income after taxes. 

Consider:

• Your monthly expenses (housing, food, childcare, debt)
• How long you could get by on emergency savings
• Whether your employer offers group coverage

You can also choose a longer elimination period (like 90 days) to reduce your premium—just make sure you have enough savings to cover the gap.

How Much Does It Cost?

Cost Factors:

• Age and health
• Your occupation (risk level)
• Income level and coverage amount
• Length of benefit period
• Elimination period

Typical Cost:

• 1% to 3% of your annual income
• Example: If you earn $60,000/year, expect to pay around $50 to $150/month

Group policies through work are usually cheaper—but may not offer enough coverage on their own.

How to Get Disability Insurance

You can get disability insurance:

• Through your employer (check if you’re automatically enrolled)
• Through professional associations or unions
• By purchasing an individual policy from an insurer 

What to Compare:

• Benefit amount and period
• Elimination period
• Definition of disability (own vs. any occupation)
• Policy renewability and inflation protection

When to Review or Update Your Policy

• When your income increases or job changes
• If your financial responsibilities change (buying a home, having kids)
• If your employer-provided coverage changes or ends
• Every couple of years to ensure it still meets your needs

Tips and Common Mistakes to Avoid

Do:

• Check if you already have coverage through work
• Understand exactly when benefits kick in
• Consider a policy with “own occupation” protection
• Get coverage while you’re young and healthy—it’s cheaper

Don’t:

• Assume you’ll be fine without income for 6+ months
• Overestimate how long your emergency fund will last
• Rely only on workers’ compensation—it doesn’t cover non-work-related issues

Bottom Line

Disability insurance might not be flashy, but it’s one of the smartest financial safety nets you can have. Your ability to earn money is your biggest asset—and this type of insurance protects it.

If you rely on your paycheck to live (like most of us do), consider disability insurance an essential part of your financial plan. It gives you one less thing to worry about—no matter what life throws your way.

Once you’ve covered the essentials—health, auto, home/renters, life, and disability insurance—you may want to consider a few additional policies that offer more protection, especially as your financial life grows more complex.

These policies aren’t necessary for everyone, but depending on your lifestyle, family, travel habits, or assets, they could save you from serious financial trouble down the road. Here's what you should know about the top “nice-to-have” types of insurance—and how to decide if they’re right for you.

1. Umbrella Insurance

What it is: Umbrella insurance adds an extra layer of liability protection on top of your existing auto or homeowners/renters insurance. It kicks in when your standard policy limits are maxed out.

Why it’s helpful: If you cause a serious car accident or someone sues you after getting injured on your property, standard liability limits (usually $100,000–$300,000) might not be enough. Umbrella insurance helps protect your savings, investments, and future income from legal claims.

Typical coverage amount: $1 million or more Cost: About $150–$300 per year for $1 million in coverage

Who should consider it:

• Homeowners
• Parents with teenage drivers
• People with large savings or assets
• Anyone who hosts guests regularly or owns dogs, pools, or trampolines

2. Pet Insurance

What it is: Pet insurance helps pay for veterinary bills if your pet gets sick or injured. Some policies also cover routine care like vaccines and checkups.

Why it’s helpful: Vet bills can be surprisingly expensive—especially for surgeries, emergency visits, or chronic conditions. Pet insurance can help you make medical decisions based on what’s best for your pet, not just what you can afford.

Types of coverage:

• Accident-only
• Accident + illness
• Comprehensive (includes preventive care)

Cost: $25–$75/month depending on your pet’s breed, age, and health

Who should consider it:

• Pet owners who would struggle to cover an unexpected $1,000+ vet bill
• Owners of breeds prone to health issues
• People who want peace of mind for their furry family members

3. Travel Insurance

What it is: Travel insurance covers unexpected problems during your trip, such as canceled flights, lost luggage, medical emergencies, or trip interruptions.

Why it’s helpful: International travel in particular can come with high financial risks if something goes wrong. A single emergency room visit abroad can cost thousands—and you may not be covered by your regular health insurance.

Common types of coverage:

• Trip cancellation/interruption
• Emergency medical
• Medical evacuation
• Lost or delayed baggage

Cost: Typically 4%–10% of your total trip cost

Who should consider it:

• Anyone booking expensive or non-refundable travel
• International travelers
• People with health conditions that could affect their trip

4. Long-Term Care Insurance

What it is: Long-term care insurance helps pay for services like nursing homes, assisted living, or in-home care when you’re unable to care for yourself due to age, illness, or disability.

Why it’s helpful: Most health insurance (and Medicare) doesn’t cover long-term care. Without insurance, the cost of a nursing home—often $5,000–$10,000/month—can quickly drain your savings.

When to buy: In your late 40s to early 60s, while you're still healthy enough to qualify Cost: Varies widely—can range from $100 to $500+/month depending on age, health, and coverage amount

Who should consider it:

• Adults approaching retirement
• Those with a family history of dementia or chronic illness
• People without a strong support system or family caregivers

5. Identity Theft Insurance

What it is: Identity theft insurance helps cover the cost of restoring your identity and repairing financial damage if someone steals your personal information.

Why it’s helpful: Recovering from identity theft can be time-consuming and expensive. This insurance may help pay for legal fees, lost wages, credit monitoring, and identity recovery services.

Cost: $5–$25/month, often available as an add-on through homeowners or credit card providers

What it covers:

• Identity restoration assistance
• Reimbursement for stolen funds and expenses
• Credit monitoring and fraud alerts

Who should consider it:

• Anyone who shops or banks online
• People with poor credit or financial vulnerabilities
• Victims of previous data breaches

Final Thoughts

You don’t need every type of insurance out there—but as your financial life grows more complex, so does your need to protect it. The policies on this list can help fill the gaps that your core insurance may not cover.

If you have pets, travel frequently, or want to shield your assets and future income, adding one or more of these “nice-to-have” policies could be a smart move. As always, read the fine print, compare options, and choose based on your real-life risks—not fear or sales pressure.

Insurance should give you peace of mind—not add stress. These options are here to help you feel even more secure.

Not all insurance is smart insurance. While health, auto, life, and homeowners insurance are essential, the insurance industry is filled with add-on policies, upsells, and “protection plans” that sound good—but rarely deliver the value they promise.

Some of these are flat-out unnecessary. Others are so limited or overpriced that you’re better off skipping them and focusing on building an emergency fund or strengthening your core coverage.

Here are the top types of insurance and extended warranties that most people don’t need, along with smarter alternatives.

1. Extended Warranties (Appliances, Electronics, etc.)

Extended warranties are often pushed when you’re buying TVs, laptops, refrigerators, or smartphones. The idea is that for a small extra fee, you’ll get peace of mind if your product breaks.

Why it’s usually a waste:

• Most products don’t break during the extended coverage period.
• Manufacturer warranties usually cover the first year already.
• Repairs are often cheaper than the cost of the plan.
• Fine print may exclude accidental damage, wear and tear, or user error.

What to do instead: Save that money for real repairs or replacement if needed.

2. Credit Card Payment Protection Insurance

This is often offered by your credit card company to cover your minimum payments if you become unemployed or disabled.

Why it’s usually a waste:

• Monthly fees are high.
• It only covers minimum payments, not your full balance.
• Strict requirements and delays make it hard to claim.

What to do instead: Put that monthly fee toward emergency savings or disability insurance.

3. Mortgage Life Insurance

This policy pays off your mortgage if you die. It sounds useful—but there’s a better option.

Why it’s usually a waste:

• Your family doesn’t get to decide how the money is used.
• The payout value decreases over time as your mortgage shrinks.
• It's more expensive than term life insurance.

What to do instead: Buy a term life insurance policy with enough coverage to handle the mortgage—and more.

4. Rental Car Collision Damage Waivers (At the Counter)

When you rent a car, you’re often pressured into buying the rental company’s insurance.

Why it’s usually a waste:

• Your personal auto insurance likely already covers rentals.
• Many credit cards offer rental car protection for free.
• These waivers can cost $10–$30 per day.

What to do instead: Check your auto insurance and credit card before renting. Buy coverage only if you’re not already protected.

5. Airline or Concert Ticket Insurance (During Checkout)

When you book flights or events, you’ll often be offered cancellation insurance.

Why it’s usually a waste:

• Very limited protection—often excludes common reasons for canceling.
• Difficult to get claims approved.
• Expensive compared to what it covers.

What to do instead: If the trip is costly or international, buy separate comprehensive travel insurance.

6. Accidental Death and Dismemberment (AD&D) Insurance

This pays a benefit if you die or are severely injured in an accident.

Why it’s usually a waste:

• Doesn’t cover death from illness, which is far more likely.
• Pays nothing if you become disabled by disease.
• Limited, specific payout terms.

What to do instead: Use term life and long-term disability insurance—they cover all causes, not just accidents.

7. Disease-Specific Insurance (Like Cancer Insurance)

These policies pay out only if you’re diagnosed with a specific illness like cancer.

Why it’s usually a waste:

• Narrow coverage—you could get seriously sick and receive nothing.
• Often duplicates what health or disability insurance would already cover.

What to do instead: Strengthen your health and income protection instead.

8. Cell Phone Insurance

Cell phone protection plans are often pushed by phone retailers and carriers.

Why it’s usually a waste:

• High deductibles and monthly costs.
• Long wait times for repairs.
• Refurbished replacements—not new devices.

What to do instead: Use a good phone case and keep a small tech fund for replacement costs.

9. Pet Wellness Plans

Some companies offer wellness plans for pets that cover checkups and preventive care.

Why it’s usually a waste:

• You’re pre-paying for routine care that’s often cheaper out of pocket.
• Plans rarely save money—and may limit where you can go.

What to do instead: If you want coverage, look for pet insurance that focuses on emergencies, illness, and surgery—not routine visits.

Final Thoughts

Insurance is meant to protect you from big financial risks—not small inconveniences. If you’re being asked to insure something inexpensive, short-term, or already covered elsewhere, it’s worth questioning whether that protection is necessary.

Instead of paying for duplicate or limited policies:

• Build your emergency fund
• Strengthen your core coverage (health, life, disability)
• Avoid fear-based upsells at checkout counters

Not all insurance is bad—but not all insurance is good either. Know the difference, and your money will go a lot further.