a man reviewing insurance that he should not cut

The purpose of insurance is to protect assets and shelter you from financial harm. As a result, it should always be part of your financial planning.

Choosing the right policies can safeguard your earnings and your property, but with so many insurance policies available, the temptation exists to cut some and hope for the best. However, some policies are absolute necessities. Here are the top personal insurance coverages you can’t afford to cut.

Health Insurance

Medical care costs continue to rise and if you do not buy health insurance it can mean going without the care you need when you need it, or going into debt. Statistics show the average cost for inpatient care for one day is between $1,791 and $2,289 per day in the U.S.

Serious injuries or conditions often require multiple office visits, prescriptions, referrals, and tests. Costs can run into five or six figures, and you bear the burden without coverage.

Homeowner’s, Condo, Renter’s Insurance

Disasters can occur anytime and anyplace. Your home could catch fire, someone could steal an expensive item, or a pipe could burst and flood your home. Few people can afford to replace expensive belongings, never mind their home.

Additionally, few people realize the value of what they own. Insurers always recommend creating a home inventory to estimate the value of belongings, and an annual review to align coverage with current prices and your needs.

Finally, home insurance, condo insurance, or renter’s insurance can protect you from lawsuits if someone injures themselves on your property. A lawsuit without insurance could seriously impacts your financial future.

Automobile Insurance

The Insurance Research Council estimates an average of one in eight drivers in the U.S. chooses to operate their vehicle without auto insurance. Not only is this illegal – it is also extremely dangerous.

If you’re involved in an accident and injure or kill a person or damage property, you may find yourself in a costly lawsuit, which could empty your bank account and tap into future earnings, too.

State minimums do not provide sufficient coverage either. Many states only require $25,000 for bodily injury per person; $50,000 for total bodily injury; $25,000 for total property damage. If you put a person in the hospital or write off their new car, this isn’t sufficient.

Long-Term Disability Insurance

No one wants to even think about living with a disability, but ignoring it doesn’t eliminate the risk. The American Community Survey (ACS) estimates 12.6% of the U.S population lives with disabilities, with 51.1% are between age 18 and 64.

Working people cannot afford to lose their source of income, especially since disabled people have less than half the chance of finding new employment. Consequently, it is very important to have a disability insurance policy to compensate you for lost wages if you can no longer work. Disability insurance provides compensation for temporary or permanent disabilities, whether partial or total.

Life Insurance

Life insurance ensures the well-being of your dependents and partner when they rely on your income. Should you pass away without protection, they’ll bear the burden and struggle financially.

The 2017 Insurance Barometer Study states 69% of property owners would have trouble paying living expenses in two years or less if they were to lose their primary wage earner.

Insurers often recommend you buy coverage to replace your monthly income up to age 65 and to pay your debts. By age 65, your partner should have investment income from pensions and Social Security and your children should be independent. Insurance companies also recommend you include your children’s education, retirement goals, and inflation in your calculations.

If you have questions about any of these coverages, or if you’d like us to review your existing policies, give us a call. We’ll make sure that you and your family are protected so can you focus on living more and worrying less.