While we generally can't prevent the unexpected from happening, sometimes we can get some protection. The goal of insurance is to protect us, at least financially, in the event that certain things happen. But there are many insurance options, and many financial experts will say you need to have them all. It can be difficult to determine the insurance you really need.

The correct type of insurance and the amount of insurance is always determined according to your specific situation. Factors like children's benefits, age, lifestyle and employment play a role when you build your insurance portfolio. However, there are four types of insurance that most of our financial experts recommend: life, health, auto, and long-term disability.

life insurance

The greatest benefits of life insurance include the ability to cover your funeral expenses and support those you leave behind. This is especially important if you have a family that depends on your wages to pay the bills. Industry experts suggest a life insurance policy that covers 10 times your annual income. But this is a number that not everyone can afford.

When calculating the amount of life insurance coverage you need, remember to consider not only the expenses of the funeral, but also the expenses of daily living. These may include mortgage payments, outstanding loans, credit card debt, taxes, childcare, and future college costs.

According to a 2018 study conducted by LIMRA, formerly known as Market Research and Life Insurance Associations, one in three families may not be able to cover their daily expenses within a month of the death of the main breadwinner.

The two main types of life insurance are traditional life and long-term life. Simply put, whole life can be used as an income tool and as an insurance tool. As long as you continue to pay the monthly installments, your whole life will cover you until you die.

On the other hand, the term life is a policy that covers it for a specific period of time. There are other big differences between the two types of insurance, so you may want to seek the advice of a financial expert before deciding what is best for you. Factors to consider include your age, occupation, and number of dependent children.

health insurance

Statistically, you and your family are just a serious illness away from bankruptcy, according to a study published by the American Journal of Public Health in 2019. In the magazine's survey of more than 900 Americans who filed for personal bankruptcy between 2013 and In 2016, two out of three bankruptcies caused more. Due to medical problems, such as bills, loss of income due to illness, or both.

These numbers alone should motivate you to get health insurance or a review and may increase your current coverage. But with higher copays, more discounts, and less coverage, health insurance is becoming less affordable. When you consider the average national cost for a day in the hospital was $ 2,517 in 2018, even a minimum policy is better than nothing.

The best and least expensive option may be to participate in the employer's insurance program, but many small businesses do not offer this feature. The average annual cost for an employee in an employer-sponsored health care program was $ 7,188 for individual coverage and $ 20,576 for the family plan in 2019, according to research published by the Kaiser Family Foundation.

If you don't have health insurance through your employer, check with organizations or trade associations about possible group health coverage. If this is not an option, you will need to purchase private health insurance.

Long-term disability coverage

Long-term disability insurance is the only type of insurance that most of us believe we will never need. However, according to statistics from the Social Security Administration, three out of 10 workers entering the labor market will be disabled and will not be able to work before reaching retirement age.

Many times, even those workers with great health insurance, good savings, and a good life insurance policy don't prepare for a day when they can't work for weeks, months, or again. While health insurance pays for hospitalization and medical bills, you still have those daily expenses that are generally covered by your salary.

Car insurance

On average, there are six million car accidents in the United States each year, according to the National Safety Council. An estimated 38,800 people died in car accidents in 2019 alone. The leading cause of death among Americans between the ages of five and thirty-four was car accidents, according to the Death Analysis Analysis System (FARS) in the data. 2009 (latest available data). More than two million drivers and passengers received emergency room treatment in 2009, and the costs of these accidents, including deaths and disabilities, were approximately $ 70 billion.

While not all countries require drivers to obtain auto insurance, most have regulations on financial responsibility in the event of an accident. Countries that require insurance regularly carry out random checks for drivers to test insurance. If you don't have coverage, fines can vary by state and can range from suspending your license, to points on your driving record, to fines of $ 500 to $ 1,000.

If you drive a car without car insurance and have an accident, fines can be your lowest financial burden. If you, a passenger or another driver is injured in the accident, automobile insurance will cover the costs and help protect you from any lawsuits that may result from the accident. Auto insurance also protects your vehicle from theft, vandalism, or natural disasters, such as hurricanes or other weather accidents.

Again, as with all insurance, your individual circumstances will determine the cost of auto insurance. To ensure you get the insurance that's right for you, compare the many price quotes and coverage provided, and check back periodically to see if you qualify for lower prices based on your age, driving history, or region where you live.

The bottom line

Most experts agree that life, health, long-term disability and auto insurance are the four types of insurance you should have. Always check with your employer first for available coverage. If your employer doesn't provide the type of insurance you want, get quotes from various insurance providers. Those who offer coverage in multiple regions may offer some discounts if you buy more than one type of coverage. While insurance is expensive, it can't be much more expensive.