What Insurance Do I Need? Essential Steps

Shopping for insurance probably isn’t the most glamorous item on your to-do list, but protecting yourself, your family, and your belongings is a must.

Health, homeowners, renters, and auto insurance are four of the most important kinds of insurance. These insurance types don’t need to break the bank, either. Check out the Financial Heartbeat in the MoneyLion app to get your coverage set up and organized!

Here’s more on how to protect yourself and your possessions.

Low-Cost Insurance to Fit Your Budget

The best piece of advice to keep in mind as you fit insurance into your budget is to shop around. Your monthly premium — the amount you pay for the insurance each month — will be different from your next-door neighbor’s. 

Why? Because you both have different needs and lifestyles. It’s important to get a tailored policy and custom quote so you know what works for you and your budget. 

Health Insurance

Health insurance costs and coverage can vary greatly from person to person. Some of the factors used to calculate individual premiums include age, location, number of people insured, and even tobacco use. This type of insurance provides coverage when you visit the doctor, have an emergency, or need to see a specialist. You will likely have a copay and a deductible, and these figures are based on your provider and policy terms. 

A copay is what you are responsible for at the time of your visit — it refers to an amount you pay out-of-pocket for each visit. For example, this could mean when you visit your doctor, you pay $20 for your copay. 

You’ll also have a deductible. Let’s say you have a $7,000 deductible. This means that through the course of a year, you will pay up to $7,000 out of pocket toward your health care costs before insurance kicks in and starts paying for everything after that. That might seem like an overwhelming amount, but think of it like this. If you’re seriously injured and spend time in the hospital, you’ll likely get billed for ten times that amount. You don’t want to be on the hook for that amount! In fact, the number one cause of personal bankruptcy is medical bills. Better to be safe and covered.

Shop around to get the best insurance possible. Work with an agent or browse online and get multiple quotes from many different providers. Check to see if your employer offers healthcare and take advantage of their programs. You will likely have to pay a premium, but it’s usually cheaper than getting coverage on your own. The Affordable Care Act is another viable option, so check to see your eligibility and the requirements here

Expert tip: Shop around every year or so you know you’re always getting the best bang for your buck.

Auto Insurance

It’s common to think long and hard about choosing the exact shiny new car you want. Just remember that you’ll need to devote some of that energy toward choosing the right auto insurance. Just like health insurance, car insurance protects you in the aftermath of an accident or another type of incident. In most states, aside from New Hampshire, it is legally required to insure your vehicle. 

There are different types of auto insurance, including comprehensive, collision and liability.

  • Comprehensive coverage ensures that you will be reimbursed in full if your vehicle is damaged or stolen. Think of this as full replacement coverage. 
  • Collision coverage generally means that insurance will pay for fixes if you are involved in an accident or have property damage as a result of weather-related incidents. If your car is deemed unfixable, you’ll likely receive payment for what the car is currently worth — not what you bought it for. 
  • Liability coverage, also known as state minimum coverage, includes protection for you if you are involved in an accident and injure another party. The insurance will pay for the medical bills, lost wages and damages the other person suffered as a result of the auto accident. 

Each of these coverage options requires a monthly premium and deductible. Your monthly premium for comprehensive coverage will be much greater than liability-only coverage. Factors such as age, credit score and driving record all impact your monthly payment as well. 

Get the best, cheapest coverage by getting multiple quotes from multiple companies. Talk to an agent directly, get quotes online and read company reviews. 

Expert tip: If you want to lower your car insurance premium, pay off your vehicle as soon as possible. When you have a loan on your car you are required to carry full coverage but if you own your car, you can opt for which coverage you’d like. 

Renters or Home Insurance

Insuring a property you own or rent is not only a good idea, but it’s also often required, especially if own the home and have a mortgage on the property. This type of coverage is a good idea because if you find yourself in a situation such as a house fire or robbery and lose all of your personal belongings, you’ll have to start over on your own. With coverage, however, the insurance company can payout to help you rebuild or recover. 

With home and renters insurance, your premium is typically calculated based on home and personal property value, age of the property, safety devices, your past claims history, and other factors. A higher home value equals a higher monthly premium. 

You can customize your home insurance based on your needs. For example, if you have a lot of expensive valuables in your home like technology, jewelry or musical instruments, you can add additional coverage for these items. If you want to just protect your dwelling or an antique car, then you can do that, too. 

Shop around and compare prices before continuing with one company. Many offer discounts based on claims history, your profession and more.

Life Insurance

Life insurance might be something you deem unnecessary, but is it? It honestly depends on your situation. If you are young and healthy with no dependents, then you probably don’t need a life insurance policy right now. The upside to getting life insurance when you’re younger is that your premium will likely be cheaper than when you’re older. 

Life insurance is important for people who are battling a terminal illness or have dependents. When you have a lot of financial obligations such as children, debt or a mortgage, then a life insurance policy can help your loved ones in the event of your passing. 

One of the most common types of life insurance is term life insurance. You’ll likely encounter a 15-year term, a 20-year term and so on. This means that you will pay a fixed amount over those years and if you die within the term, your beneficiary receives the payout. (A beneficiary is who you choose to receive benefits). 

Another popular option is whole life insurance. You pay a monthly premium for the duration of your life. It’s best to get it while you’re young and healthy so you pay a smaller premium.

There are other types of life insurance, too — do some research to determine which is the right choice for you.

Insure Your Future

Take control of your life and protect yourself against the unforeseen with insurance. Your best bet is to shop around for the best health, home and auto rates you can find. If you are curious about what kind of insurance you have or need, check out the MoneyLion Financial Heartbeat tool and take a quiz that will point you in the right direction. You can also track your coverage here too!