<p>Recent studies show that just <a href="https://www.census.gov/library/publications/2020/demo/p60-271.html">over 26 million people</a> in the US don’t have health insurance. While that’s startling, we actually totally get it. It’s expensive. Millennials have been particularly affected, putting off visiting the doctor due to the cost, with national health care costs per person only having <a href="https://www.businessinsider.com/personal-finance/half-of-millennials-delay-medical-care-unaffordable-2019-10">increased by $9,000</a> since 1970.</p><p>While we’re not here to shame you into getting health insurance, we are here to talk you through some of the different types of insurance policies everybody should have or at least aim to have as they age into their 30s and 40s. Why? It’s important to be protected!</p><p>Not only are certain types of insurance policies legally required (like basic auto liability coverage), but having a policy in the case of an accident or natural disaster can save you thousands of dollars in the long run.</p><p><strong><em>Already have insurance and simply want to start investing in yourself and your future? Download the Wealth Stack app </em></strong><a href="https://cmpd.app.link/webDLApp"><strong><em>here</em></strong></a><strong><em> to get started.</em></strong></p><h2>What is Insurance?</h2><p>An insurance policy is a kind of risk management policy that provides financial protection for individuals and companies in the event of an unexpected loss or accident.&nbsp;</p><p>How do these policies work? You pay a monthly or yearly premium in exchange for benefits. These benefits can vary depending on the type of insurance policy you have and the plan you're paying for.&nbsp;</p><p>For example, if you get health insurance through your employer, that may provide coverage for regular doctor visits and prescriptions. However, if you <a href="https://www.investopedia.com/articles/active-trading/120814/life-insurance-smart-investment.asp">get a life insurance policy</a>, the benefits work in a different way: by replacing your income upon death.</p><p>Everybody needs insurance, but different types of policies are recommended at specific points in life. Here are the top five most common types of insurance policies that everybody will likely need at some point in their life.</p><h2>Types of Insurance Policies Everybody Needs to Have</h2><h3>1. Medical Insurance</h3><p><strong><em>What does this type of insurance protect you from? Medical insurance provides coverage for medical expenses in case of an accident or illness.</em></strong></p><p>Medical insurance in the US is a topic of much debate. It's expensive, it's confusing, and it's honestly a massive hassle to try and figure out yourself. However, it's perhaps the most important insurance policy you need to have for yourself and for your family.</p><p>Health insurance covers medical and surgical expenses, like ER visits and hospitalization due to illness or injury. It also covers things like lab tests and x-rays that would otherwise be super expensive out-of-pocket.</p><p>What types of health insurance policies are available? There are two types of insurance you can purchase. Indemnity coverage, which is typically more expensive but provides more flexibility for services covered by your plan. The other option is a managed care policy, which limits the types of doctors and hospitals you can visit as well as what types of services are available to you.</p><p>Really, what’s important to understand about health insurance is the amount you’ll pay for your monthly premium. And, you’ll want to know what your deductible is. You can find basic, cheap health insurance but it often comes with a high deductible that’ll leave you paying tons of out-of-pocket costs. <a href="https://onomy.co/blog/deductible-vs-out-of-pocket-expenses-whats-the-difference-in-health-insurance/">Here’s a guide</a> that’ll help you understand the differences between all of those new terms.</p><h3>2. Life Insurance</h3><p><strong><em>What does this type of insurance protect you from? Life insurance protects you and your family from financial hardship if something happens to you.</em></strong></p><p>There are different types of life insurance policies to choose from, but the main types are term and whole.</p><p>If you’re looking for an affordable type of insurance, term life insurance is your best bet. You can pay roughly $20-$30 a month depending on how much coverage you need. The cool thing about term life insurance, though, is that the $20-$30 you're paying monthly goes towards&nbsp; your coverage and to your beneficiary (the person you want the insurance money to go to when you pass away).</p><p>Are there types of life insurance policies that don’t expire after a certain time period? Yes! Whole life insurance is another good option for those looking for more long-term financial protection. And, we know what you’re probably thinking by this point. “I’m young and healthy. <a href="https://www.moneyunder30.com/is-life-insurance-worth-it">Do I really need life insurance</a> right now?” It depends, really, but the younger you are, the cheaper the plans usually are. And, in the event of an accident, you’ll be thankful that you took care of your loved ones.</p><h3>3. Car Insurance</h3><p><strong><em>What does this type of insurance protect you from? Car insurance covers damage done by a car to other people's cars as well as any injuries sustained while driving it.</em></strong></p><p>Basic liability auto insurance covers the damage your car causes to other people’s property in an accident, but not damage to your own vehicle or any personal injury claims. This is a state-mandated kind of insurance policy that you’re required to have in order to drive legally.</p><p>However, you can also choose to increase the type of premium you’re paying for to cover other things, like damage caused by someone else’s car or even theft. Ultimately, we suggest viewing auto insurance like an investment on top of an investment. If you're paying $50,000 for a <a href="https://wealthstack.us/buy-or-lease-a-car/">nice car to drive around in</a>, you'll wanna protect that investment.</p><h3>4. Homeowners or Renters Insurance</h3><p><strong><em>What does this type of insurance protect you from? Homeowners insurance covers your home, its contents, and anything that is attached to the property in the case of theft or disaster.</em></strong></p><p>Aside from protecting the house itself and the belongings inside of it, homeowners insurance also covers you in the event someone gets hurt on your property. Is homeowners insurance required?&nbsp; Maybe. It depends on where you live. Some states require homeowners insurance <a href="https://wealthstack.us/can-homeownership-build-wealth/">if you own property</a>.</p><p>If you’re renting, renter insurance is a must to cover all types of damage done to your apartment or house including anything left behind by previous guests! It also protects against any lawsuits that may come from someone getting injured at your place.</p><h3>5. Umbrella Insurance</h3><p><strong><em>What does this type of insurance protect you from? Umbrella insurance is a type of policy that acts as, well, an umbrella! It covers you for things that aren’t covered by your other insurance policies.</em></strong></p><p>Allstate notes that things typically <a href="https://www.allstate.com/tr/personal-umbrella-policy/whats-umbrella-insurance.aspx">covered by an umbrella insurance policy</a> include bodily injury, personal injury, property damage, and landlord liability. These types of insurance policies, however, don’t tend to cover things like business losses or personal belongings that are stolen.</p><p>So say, for example, someone sues you for something that isn’t your homeowners or renters insurance doesn't cover. This policy will cover the cost of any legal fees, lost wages and damages associated with your case! Another example would be if your auto insurance only covers damage up to, let’s say, $250,000. If you owe more, your umbrella insurance policy could cover the additional costs.</p><h3>BONUS: Insurance Annuities</h3><p>Want to grow your wealth? Then <a href="https://www.greatamericaninsurancegroup.com/for-individuals">look into insurance annuities</a>. Let's clarify, however, that annuities aren't an insurance policy, but rather a contract between the investor and the company selling the annuity. </p><p>The investor (you!) agrees to provide the insurer with a one-time initial payment. Depending on the type of annuity you invest in (like deferred or immediate), you are required to make future payments, where the insurance company promises you can withdraw your initial investment plus a percentage of interest if needed.</p><p>This is not only a tax-deferred way to invest in your future, but it also allows you to receive guaranteed lifetime income well into retirement. Depending on the pay structure, you can receive the payments over a set number of years, like 10 or 20.</p><p>Read more about the pros and cons of annuities <a href="https://www.investopedia.com/articles/retirement/08/annuity-mutualfund.asp">here</a>.</p><h2>Invest in Yourself &amp; Your Future</h2><p>Insurance policies are just one of many ways to protect yourself and your loved ones while also investing in your financial, health, and general future. View these different types of insurance policies as an investment in yourself and you’ll eventually understand the value that they can offer you in the case of an emergency or accident.</p><p>However, paying an insurance premium isn’t the only way you can invest in yourself. You can also learn how to invest in stocks, for example. Understanding the value of compound interest and the ways in which top investment pros create long-term wealth for themselves can help you build a better future. Plus, the earnings you make from investing can help you offset the costs of these insurance premiums!</p><p>Not sure where to start as a beginner investor?&nbsp;</p><p><strong><em>Download the Wealth Stack app for free on the </em></strong><a href="https://apps.apple.com/us/app/cmpd-wealth/id1556542229"><strong><em>App Store</em></strong></a><strong><em> or on </em></strong><a href="https://play.google.com/store/apps/details?id=io.cmpd.compound"><strong><em>Google Play</em></strong></a><strong><em> so that you can start learning through our helpful video courses. Our in-house investment pro created them, so you’ll be getting FREE access to top investment knowledge.</em></strong></p>

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