Savvy Tips & Helpful Hints

3 Types Of Insurance That Every Family Needs

With so many types of insurance available today, it is easy to get overwhelmed trying to figure out which policies you’ll need and which ones you can do without, especially when on a budget. This is why it is so important to do your research so that you can truly understand the different types of insurance policies available to you before making any coverage purchasing decisions. I am talking about insurance policies needed to protect your family in the event they are needed and below I will discuss three types of insurance that will protect your family for years to come. Let’s take a look at these important policies that every family needs.

Life Insurance

If you visit this site often, you know that I have posted many times about the importance of having life insurance for your family. Life insurance is an insurance policy that will provide income to your family in the event something were to happen to you. It is so important to prepare for those ‘what ifs’ because you never know when you may need it. There are two types of life insurance to choose from and they are term life insurance and whole life insurance. I am a fan of Term Life Insurance as it is the least expensive option of the two and provides me life insurance without needing a checkup first.

Term Life Insurance is chosen by most young families because they want to get some coverage in place but that do not want to spend money on a policy that can last a lifetime. With Term Life Insurance you buy it for a set amount of time and then after a set amount of time, the policy expires. Term Life insurance policies can last anywhere from 10 years to 30 years on average…. depending on the policy you purchase and you and your family are covered for the duration of that particular term life policy. The pros are there are usually no medical exams or check ups needed for a Term life insurance policy but the cons are that once the policy expires you have to start a new one and also there is no cash value that you can tap into as compared to a whole life insurance policy.

Whole life insurance is a great choice if you have the budget to commit to this type of life insurance and part of the funds that you put into it builds cash value and also the policy pays dividends that make that cash grow as the years go by. The pros to a Whole life insurance policy are that you can tap into that cash when you need it later down the road and the cons are that it is pretty pricey and for me is out of my budget at the moment. A good example is let’s say you are a 25 year old female getting term life insurance…… it would cost around $30 per month for a 30 year term life policy BUT it will cost that same 25 year old female $351 per month for the whole life insurance policy. That is a huge difference and it is the reason that Term Life Insurance is the popular choice by far.

Disability Insurance

Disability insurance is a type of insurance that many people do not think to buy, but it is extremely important to ensure you are covered, especially for younger families. Our biggest asset in life is the ability to work and make a living and if something were to take that ability away from you at an early age…. it could be detrimental to your earnings potential which is why having good Disability Insurance in place is so important. Again it is all about preparing for those ‘what if’ possibilities, especially when you have a family depending on you.

Disability insurance will provide income, usually around 60% of your former earnings, but that can vary depending on your disability insurance policy, so do your research to find the best disability insurance plan to fit your budget and needs. Disability is more likely to happen than anyone thinks and I recently read an article that over 25% of todays 20 year olds will be disabled before retirement which is tremendous and which makes me realize even more the importance of having a good disability insurance plan.

When it comes to Disability insurance, most people who are traditionally employed would be able to  secure a policy through their employer but people like myself who are self-employed will have to take out an individual policy. I also know of people that have supplemented their employer’s policy by buying a private policy of their own to ensure that they have the coverage they need because they have dependents relying on them. It is also important to note that once you retire you will no longer need this policy.

Long-Term Care Insurance

Long-term care insurance is a type of insurance that helps to pay for expensive elderly care expenses, especially for anyone with chronic diseases, disabilities, or other health conditions that will require daily attention and care over a long period of time. Obviously health insurance covers hospital and doctor bills, but it does not cover things such a nursing homes, assisted living, adult day care services and home care which can be really expensive and that are a necessity.

Long-term care benefits will only kick in once you qualify to use them, which will be verified by your doctor when the person needs the aid. Your doctor will in turn reach out to the insurance company to get the help that you will be needing. It is a smart option to consider if you can fit it into your budget as you never know what the future holds and if you will be able to depend on your spouse or the rest of your family to provide for long-term care. It is also important to note that long-term care insurance gets more expensive the older you get, so it is a great idea to look into this option well before you need it. Unlike disability and life insurance, long-term insurance is a policy you will always need.

Deliciously Savvy received product and/or compensation in exchange for an honest and unbiased review post and all opinions are 100% my own. Thank you for stopping by and enter a giveaway or two while you are here!

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