Did you know that nearly 6,000 insurance agencies are active in the US? More than 2,500 of these are property and casualty insurance companies. They are the ones who sell auto and home insurance.
This should give you an idea about the diversity of the insurance industry.
Now the big question is: Which of these provides essential insurance coverage?
We have compiled a list of 7 Essential insurance plans that everyone should own. So, make sure you continue reading!
1. Health Insurance
Even though it is no longer required by law, this type of insurance should not be ignored. This is right: Health insurance at the federal level has been removed from the US as of January 2019.
Some states, like New Jersey and California, have state-imposed laws. These states have health insurance that is mandatory or will be required.
A health plan can be a great way to reduce the financial burden associated with medical expenses. You can lower your out-of-pocket spending on healthcare services by purchasing health insurance. Comprehensive policies may offer preventive services such as screenings or check-ups.
Consider that the USA’s health care spending could reach an astounding $6 trillion by 2027. This is a stark reminder of how costly medical care has become. You could be at great risk if your health plan does not cover you. You could end up paying astronomical hospital and medical bills if you don’t have a health plan.
Are you unsure where to begin when purchasing health insurance? Compare plans to get a better understanding of which plan covers what and what doesn’t.
2. Motor Vehicle Insurance
Only two states in the country don’t require the purchase of auto coverage. Virginia and New Hampshire are these two states. It is your legal responsibility to have auto insurance if you don’t live in one of these states.
Even if your origin is in the Old Dominion State or Granite State, “proof of liability” is still required. For example, if you are at fault for a crash in NH, then you will need to prove that you can afford the damages. You could lose your driving privileges.
Virginia allows you to “skip” your auto insurance. However, you will need to pay $500 if you want it. This fee is called the “Uninsured Motor Vehicle Fee.” It is a permit that allows you to drive without insurance. You will be responsible for any damages if you are involved in an accident.
Road crashes are very common in the US. They cause at least 4.49 million serious injuries every year. These accidents result in the loss of at least $871 billion annually to society and the economy.
3. Insurance for Renters and Homeowners
These types of Essential insurance plans are not require by federal or state law. But, mortgages are often require for homes that were purchase with a mortgage. 62.9% had this experience. This is one of the most important requirements for mortgage lenders.
Although renters’ insurance doesn’t fall under any federal or state law landlords may demand it from tenants. It is usually part of a rental agreement and protects the property rented out. It also protects renters as it covers their possessions.
Even if you don’t have a landlord or are already free of mortgage, you should still get insurance. You can be protect from unexpect losses by purchasing homeowners’ or renters insurance. You can also use it to pay for repairs or replacements of property that has been damage by an accident.
4. Flood Insurance
The Flood damage coverage is not cover by the basic insurance policies for homeowners. Flood insurance is require for properties located in high-risk flood zones. This includes homes that have received government support.
Even if you live in a low-risk area, flood insurance is still recommend. First, floods have increased in frequency in the US by more than 2000. Flood damage is a serious threat to homes even if they are low- or moderately-risk.
5. Life Insurance
70% believe life insurance can help protect their financial well being. This makes it an essential type of insurance. However, only half of respondents claimed they have one. Another group member was unsure whether they have a life insurance policy.
No matter where you are in the US, you don’t have to buy this type of insurance. It’s your life and the future of your family members on the line. In the event of your death, a life insurance policy will protect your loved ones’ finances.
You can even create a savings account by purchasing life insurance policies. These policies include permanent life policies such as whole or universal life insurance plans. These policies come with an annual “cash value” component.
You may be able to borrow or withdraw from your savings account after a certain time period, such as ten years. The money can be use as you like while you are still alive.
6. Workers’ Compensation
49 states require workers’ compensation. This coverage is not require in the US except for the Lone Star State.
Employers are legally responsible for workers’ compensation. Employers must purchase workers’ comp for their employees. They will be subject to severe penalties, both at the federal and local levels.
Ensure that your employer offers workers’ compensation. You should be cover for any injuries or illnesses you may sustain while on the job. In the event that you are unable to work because of a health problem, your policy should pay for lost wages.
7. Disability Insurance
Sixty-one million adults (or 25%) have at least one form of disability. Most of them have mobility issues, followed by cognition problems. These conditions are not just for older people, but also affect younger people.
A disability can severely impact one’s ability and willingness to work. These health conditions can also cause an increase in healthcare and medical costs.
You can safeguard yourself and your financial security with disability insurance. Your loved ones, who are dependent on your income, will also be protect by disability insurance. If you are unable to work because of a disability or illness, it can help you pay your bills and other expenses.
These Essential Insurance Plans Should Not Be Forgotten:
These are Seven essential insurance plans that almost everyone would benefit from. You can also get travel insurance but these should be your top priorities. You should also get them as soon as possible, because the longer you wait the more costly they might become.
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