What insurance do you really need? The costs of insurance can add up fast. If you’re on a tight family budget, you might be wondering what you can cut back on.
Here are the most crucial types of insurance that your family needs and how to keep costs down.
#1: Life Insurance
It’s something that no parent wants to think about … but what would happen to your kids if you died? Sadly, one child in 29 loses a parent before they grow up.
If you’re the main income earner in the household, or if you’re a single parent, then it’s particularly crucial that you take out life insurance. This gives you the peace of mind to know that, if the worst was to happen, the costs of having a child would be covered.
You may also want to consider disability insurance, in case you become unable to work due to illness or injury. This type of insurance can be either short term or long term, so you’ll want to compare different policies to be sure you get the right coverage. Do a quick search for what qualifies as short term disability insurance vs long term disability insurance to be sure you understand the difference between the two before you make any final decisions.
Tip: Make sure you shop around, as life insurance policies can vary a lot. There are also a number of different types of life insurance out there, too, so make sure you choose a policy that will suit your family’s needs.
#2: Health Insurance
If you’re in the USA, you need health insurance. Often, the best option is to participate in your employer’s insurance program – though it’s certainly possible to buy private health insurance if that works better for you.
You may be able to be covered by your spouse’s program, if you’re not employed or if your employer can’t offer much. Make sure you spend some time looking into the best options for your family – and that you’re covered for any medical expenses you’re likely to have upcoming (e.g. if you’re planning on having another child).
Tip: Your kids can stay on your health insurance plan until they turn 26. This applies even if they get married, move out, or get a job.
#3: Auto Insurance
If you have a car, you need auto insurance. In 48 out of 50 states (New Hampshire and Virginia are the exceptions), drivers are legally required to have an active car insurance policy that at least covers liability insurance. This means it pays for injuries and property damage caused to others, if you’re at fault in an accident.
There are different levels of car insurance. Paying for a higher level of cover means that things like your repair costs will be paid for you, in the event of an accident. Of course, you should still seek out a good deal on your car insurance.
Tip: Make sure you at least meet the minimum coverage requirements in your state. If you’re leasing or financing a vehicle, you’ll almost certainly need to pay for a higher level of insurance: check with your lender about what you’ll need.
#4: Pet Insurance (Optional)
What if your family is growing with the addition of a furry friend? Pet insurance isn’t an absolute essential like the other types of insurance above – but it’s highly recommended. Otherwise, you could end up with extremely costly trips to the veterinarian.
Make sure you compare pet insurance quotes to get a good deal.
Tip: Keep in mind that it’s very difficult to get insurance that covers accidents or injuries resulting from a pre-existing medical condition. This means it’s best to get cover while your pet is young, rather than waiting until they develop any medical issues.
Raising a family might be one of the most rewarding things you do in your life, yet it brings challenges too. Make sure you get all the insurance you need in place to have peace of mind and to avoid the possibility of your family ending up in serious financial difficulties.