With soaring health care costs, a serious injury or surgery that might require a hospital stay can set you back thousands of dollars. That's why it's essential to buy insurance before you actually need it. Insurance won't immediately cover medical problems or conditions that started before you purchased the policy.
Make sure you have the most complete and cost-effective coverage available. Take a look at the Health Insurance Marketplace to comparison shop. You can also review these different types of policies to determine the right choice for you:
If you don't have adequate medical coverage through your employer or another group, you need to consider your options. Possible alternatives include:
Most states require you to carry at least basic liability insurance to cover damage you may do to others, including both bodily injury and property damage. Liability insurance also pays for potential legal bills. You can also choose to expand your coverage to pay for a variety of other possible costs like damage to your car in case of a collision, vandalism, fire, or theft. First-time car buyer? Learn more about auto insurance.
This type of insurance protects your earning power. Many employers offer some type of disability insurance, often covering about 60% of your salary. A few states offer short-term disability insurance. The Social Security Administration also offers limited disability coverage. Look into your current coverage. If a work disruption would be a financial hardship, learn more about what a private disability policy offers.
Not everyone needs life insurance. The important thing is to make sure you have it if you need it—and have the right type to suit your needs. There are two basic types of life insurance:
If you own your home, make sure you have adequate coverage to protect both your dwelling and your possessions. Depending on where you live, you may want to add on earthquake or hurricane insurance for good measure.
Your landlord's policy will cover only damage to the dwelling, not to your possessions. A renter's policy usually covers events such as fire, theft, and vandalism, and may protect you from damage due to things like faulty wiring, water, or weather.
For extra protection, you might also consider an umbrella policy. This provides coverage above and beyond your car or homeowner's insurance in the event that you are sued for an injury caused by you or your property. Umbrella policies are generally reasonably priced and can be smart coverage, especially for high-net-worth individuals. You can often get up to a million dollars in coverage for a few hundred dollars a year.
The U.S. Department of Health and Human Services estimates that at least 70% of people over 65 will require some type of long-term care services at some point. Long-term care insurance isn't cheap, and premiums and benefits vary widely. But whether you're concerned for yourself or for aging family members, think about how the cost of care vs. insurance would affect your overall financial health.
Investing involves risk, including possible loss of principal.
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