Forget About It

Having insurance lets us rest a little easier but not every type of insurance is necessary.
Forget About It
There are a lot of insurance options out there but how to do you which are necessary? Jack_the_sparow/Shutterstock
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Insurance. It’s complicated and confusing, which is why many people end up with insurance they don’t need while neglecting to carry the type of basic insurance they do need. So how are we to know? Today, I have a few common-sense guidelines to help untangle the mystery known as insurance.

Generally, you need four types of insurance:

Term Life

You need enough term life insurance to replace your income for those who are financially dependent on you. How much? A good rule of thumb is eight to 10 times the breadwinner’s annual income. And if you are not financially responsible for anyone but yourself? You can confidently scratch life insurance off your list.

Health

You need a comprehensive health policy or membership in a health management organization.

Disability

You need disability insurance to provide income when you are unable to work due to a disability.

Property

You need homeowners (or renters) and automobile insurance to replace loss of property.
Mary Hunt
Mary Hunt
Author
Mary invites you to visit her at EverydayCheapskate.com, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at https://www.everydaycheapskate.com/contact/, “Ask Mary.” This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a frugal living blog, and the author of the book “Debt-Proof Living.” COPYRIGHT 2022 CREATORS.COM
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