Listener Question: What Insurance Do I Actually Need?

TL;DR

Understand the types of insurance you need like property, life, and disability insurance to protect against catastrophic expenses.

Transcript

Alison Southwick: Alright, it's time for Answers Answers! This week's question comes from Rich! His question is about insurance. Simply put, he writes: "How much do I need to have, and what kind?" Go! Robert Brokamp: Exciting world of insurance. OK, #1, you need property insurance. For your automobiles and homes, or if you're a renter. The principl... Read More

Key Insights

• 😃 Opt for the biggest deductible policy when getting property insurance to use it for big, catastrophic expenses.
• 🛟 Life insurance is essential for income providers like parents, with term life insurance being a cost-effective option.
• ❓ Disability insurance should be considered for jobs where physical capabilities are crucial, but it can be expensive.
• ⌛ Overrated insurance products include mortgage insurance, which may not provide significant benefits as mortgage debt decreases over time.
• 😨 Long-term care insurance can be costly and not efficiently priced, with premiums potentially increasing significantly in the future.
• 🧑‍🏭 Consider 10 times your salary as a base for life insurance, factoring in existing benefits like Social Security.
• 🍉 Term life insurance in your 20s or 30s can be affordable and beneficial, providing extra coverage.

Questions & Answers

Q: What type of insurance is crucial for protecting against catastrophic expenses?

Property insurance, including homeowners and renters insurance, is essential as it helps cover big, catastrophic expenses rather than minor ones like a cracked window.

Q: Who needs life insurance?

Life insurance is necessary if someone relies on your income or the services you provide, like parenting. Term life insurance is recommended for its simplicity and affordability.

Q: Do kids need life insurance?

Kids typically do not need life insurance unless they provide income or services that would cost someone else to replace. It is often unnecessary as Gerber sells it.

Q: What is an overrated insurance product?

Mortgage insurance, which pays off your mortgage if you die, can be overrated as the value of your mortgage decreases over time with monthly payments.

Summary & Key Takeaways

• Property insurance, including homeowners and renters insurance, is essential for protecting against catastrophic expenses. Opt for the biggest deductible policy.

• Life insurance is necessary if someone relies on your income, with term life insurance being the best option.

• Disability insurance is crucial if your income relies on physical capabilities, but it can be expensive.