If you had to pick the single most important type of insurance to buy, what would it be? How about…
Car Insurance: Without at least a liability automobile policy you can’t drive a car, and will probably have a pretty tough time getting to work every day or bringing your kids to soccer practice and whatnot.
Homeowners Insurance: you’ve got to have a homeowners policy in order to buy a house, or at least get a mortgage because no bank in the world will give you a loan without making sure you first have coverage so that if something happens to your house, which is collateral for the loan, the bank won’t be up the creek.
Health insurance: everybody needs health insurance so that if something happens to you medically, if you get sick or in an accident or develop some life-threatening disease, you’re sure to be able to get the medical care that you require.
Life insurance: what happens if you die unexpectedly? Since you are no longer able to work on account of being dead, your family will lose its major source of income. Life insurance makes sure that the quality of life remains constant for your family members if something unfortunate happens to you.
These are the four major types of insurance that most people focus on purchasing and every single one of them are very important to every aspect of your life but in my opinion they aren’t the most important policies to have.
So what is the most important insurance policy? Actually, it’s one that most people don’t even think about and even less people actually purchase…
I’m talking about disability insurance. What exactly is this? Actually it’s nearly exactly like life insurance only instead of focusing on your unexpected death, if focuses on something less drastic that causes you to be unable to perform your job anymore.
Things like getting hurt on the job, or getting into some sort of automobile accident, or anything like that, that makes you unable to work anymore and therefore unable to earn a living to support your family. Most people plan for unexpected death but don’t plan for unexpected injury and it can be just as dramatic from and income losing position as far as your family is concerned.
It’s especially important if you work a manual labor type job. If something happens to you, if you break your leg or something more permanent happens like being confined to a wheelchair for life, you need to be able to continue to support your family even though you can’t work and this is exactly what disability insurance is for.
You calculate how much insurance you need much like you would if you were buying a life insurance policy. Try to make a list of all of your expenses and extrapolate that list into the future. Be sure to take into account distant things like children’s college education so that you know how much insurance to buy. Once you make your list, you can sit down with an insurance agent to hash things out in a more complete way.