Don’t buy too much insurance

Insurance it’s everywhere but which types do you need and which are a ripoff? Life, health, vision, dental, car, gap, disability, mortgage, home, liability, pet, flood, earthquake and the list continues forever.  Just about anything you can think of can be insured. The question is which types of insurance do you really need and which types are just a waste of your hard earned money?

I did a quick look at wikipedia and they have over 70 types of insurances listed and I know this doesn’t include a complete list. Do you need every type of insurance listed? Of course not, you would be paying all of your salary each month out to insurance.

Here is my unprofessional opinion on which types of insurances you need and how much you actually need. First, health insurance is a definite. If your employer doesn’t offer a group rate or free health insurance then it’s something you need to find on your own. If you are a health person then the best option is a HSA or health savings account. They have high deductibles but low premiums and cover 100% after the deductible.

Auto insurance is mandatory in most if not all states so yes you need to have to it if you are going to drive an automobile. Be sure you have a higher deductible plan such as $1000 to help save on the premiums. Also shop around to make sure you are getting the best rates in your area. Also be sure to check the rates often because it’s a very competitive market!

Home owners insurance is also a must and similar rules as auto insurance. Shop around for the best rates and make sure to get higher deductibles. Talk to insurance agents to see if you can get a bigger discount by combining your home and auto insurance with the same company.

Life insurance is also a must if you have a spouse and children. Make sure you only purchase a 20 or 25 year term policy and not a whole life policy. Term life is all you need to take care of your family. You will also be sure you have enough coverage to take care of them if something happens to you. You will want all your debt to be taken care of and enough money to pay for college and other life expenses. Life insurance rates are pretty competitive so again be sure to shop around.

If you work in a high risk work environment at your job you may want to consider disability insurance. However if this is the case it’s a good chance your employer already has disability insurance provided for you. Disability insurance can usually be purchased at a cheap price from your current health insurance provider.

No matter what type of insurance you decide to purchase be sure you know exactly what you are purchasing. Don’t just purchase something because you think you need it. Be sure you know deductables, limits and what they cover. Don’t be tricked into purchasing worthless insurance policys.