You know you need health insurance, life insurance and auto insurance. These are sometimes mandated by the state, like in the case of auto insurance. However, there are other types of insurance that will save you a financial headache if the unexpected happens. While you may not need all five of these types of insurances, it is likely you are missing out on at least one. With each of them being specific, the people who need them, need them bad.
We cover five of these lesser-known but all-too-important types of insurance you did not know you need.
1. Accidental Death and Dismemberment Insurance
You have heard of accidental death and DISABILITY insurance. Accidental death and DISMEMBERMENT insurance is different. Also known as AD&D, this insurance cover pays you if you die accidentally from non-illness related causes. The cover will also pay you if you lose a limb. This could be a leg, an arm, an eye or loss of hearing.
The huge benefit here is that you are guaranteed payment simply because you lost a limb. Disability insurance on the other hand tends to cover defined forms of disability. According to MeetFabric, people that have riskier lifestyles benefit the most from AD&D insurance.
While you might not lose an arm to the office vending machine, maybe you ride motorcycles or have risky hobbies. If your life is anything but boring, then chances are you need AD&D.
2. Long Term Care Insurance
Here is a shocking fact: a private room in a nursing home right now costs around $84,000 per year. That number will jump to over $200,000 in 30 years! That is where long-term care insurance comes in.
Because of the ballooning cost of long term care, you will need long term care insurance to cover these costs when you require these services. While similar to term life insurance, this insurance policy is structured to pay off your long-term care bills over the remainder of your life.
The difference here is that while term life insurance will pay you a lump sum when the policy matures, long term care insurance will only be triggered if you find yourself in need of long term care.
3. Long Term Disability Insurance
Most people think they will never be disabled. Statistics, however, paint a different picture. According to the Social Security Administration, 3 out of 10 new workers will become disabled. Most of these people will be unable to continue working.
To add to this, disability is responsible for almost 50% of total mortgage foreclosures. Long term disability insurance bridges this gap.
While the probability of this happening to you is low, you must weight this against the stark reality that if it does, you may be unable to work for the rest of your life. The last situation that you would ever want is to go from being your family’s breadwinner to a financial budan.
Long term disability insurance closes the gap and protects you in case anything were to ever happen. This type of insurance is mostly recommended for professionals who job involve physical labor.
4. Liability Insurance
Liability insurance comes in two types: general and professional. General liability insurance covers you and/ or your business against claims resulting from your actions. These claims may arise from bodily harm or property damage.
If you or your business interact heavily with people, you may need this. Professional liability insurance targets professionals. These are doctors, accountants, architects, etc.
If in the process of providing your professional services someone gets harmed, this cover will pay for the damages that may ensue.
5. Renters Insurance
Popular among urbanites, renters insurance is the last type of insurance we will cover. Burglaries, flooding, fire; all these are risks that threaten your belongings. While the property owner may have property insurance, their cover probably does not include your belongings.
Having renters insurance means you will get back your expensive iMac if someone steals it. The best part about renters insurance is that it is mostly cheap.
You can get a cover for as little as $5 per month. Covers that include flooding, earthquakes and other exotic risks, however, come at an extra cost.
There you go. Five types of insurance you did not know you needed but hopefully now know you need. As a quick caution, being over-insured is just as much of a problem in America as being underinsured.
As you figure out what policies to take out, remember not to overdo it. While risks abound all around, part of life is deciding which ones to pay attention to and which ones to leave to fate.