Adulting Advice: How to Know What Insurances You Actually Need

No one can truly prepare you for adulthood entirely. Hopefully, you learned a lot in school and at home from your parents. Friends and other family members might have filled in the blanks to some degree, but you might be on your own on the rest. If knowing what insurances you actually need are a point of concern, then it’s time to learn.


Insurances You Might Actually Need

It’s possible that no one taught you what insurances you actually need. Fortunately, Investopedia knows four of them:

  • Auto Insurance

The statistics behind car accidents are daunting. Tens of thousands of annual fatalities are the leading cause of death for young people. Around 7 million accidents per year injure nearly 3 million people and cost over $200 billion in damages.

Most states require auto insurance, but not all. Most will hold you financially liable for an accident, however, regardless of your coverage or lack thereof.

  • Health Insurance

Medical bills are a leading cause of bankruptcy across the country. If you have access to an employer plan, that might be your best bet. However, there is also public coverage available through the Affordable Care Act.

Private health insurance is always an option, too. Any policy can be better than none when you consider how a typical hospital overnight stay might hit $3,000. If you need routine prescriptions, drug coverage can save you quite a bit of money along the way.


Adulting Advice: How to Know What Insurances You Actually Need


  • Life Insurance:

In an ideal situation, you should have life insurance about 10 times one year of income. At a minimum, you want something that can handle your funeral expenses. You might also want more to provide for any spouses, partners, or dependents you leave behind.

One-third of families struggle to meet daily expenses in just a month after the death of a primary income earner. Consult an insurance agent about whether you’re better off with term life or whole life. Your life insurance needs will change in each stage of life, so review it at least annually.

  • Long-Term Disability Coverage:

You might assume you’ll never need it, but a quarter of all workers do wind up with some kind of disability at some point before retirement. Health insurance can cover medical bills, but it won’t replace lost income.

You’ll need that if you get disabled before your retirement nest egg is ready to carry you through your golden years. Most employers that offer insurance benefits have some kind of option.


Adulting Advice: How to Know What Insurances You Actually Need

Have Someone Shop Around for You

One of the most well-known tactics for getting the best deals on insurance is shopping around and comparing many policies. The better thing to do that lets you save time and money is by having someone else do the shopping around for you. For instance, if you need insurance in Utah, then an independent insurance agency can run your information through their network of connections and contacts to find the best coverage for you.

Four Ways to Save Money on Insurance

Having all the kinds of insurance you need can take some work. Paying for it all can be just as tricky. Fortunately, there are four ways to save money on insurance:

  • Bundle Up: Getting multiple insurance policies from the same provider usually means gradually increasing discounts for each additional coverage you get.
  • Save Money to Save Money: Save up enough money to handle some car repairs for yourself, or at least to raise your deductibles. This will mean cheaper premiums.
  • Keep Your Credit Score High: The better your credit report is, the lower your rates might be for some insurance policies.
  • Avoid Installment Fees: Paying for all your insurance in advance, when possible, might avoid the industry standard of $3 to $5 per month in installment or convenience fees.

Be Careful Which Insurance You Use

As much as you need to be careful about having the specific insurances you need, you should be just as mindful about which ones you use regularly. Having them is important for financial security, but using health insurance can save you money while filing auto insurance claims can make your premiums and rates go up. Always remember the bigger financial picture in every insurance decision.

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