Which Types of Insurance Do You Really Need?

If someone told you it was a good idea to spend money on something you may not ever use, you might think they were giving bad advice. But with insurance, that is precisely what you may be doing. After your mortgage and auto/transportation expenses, insurance is probably your largest monthly expense. Insurance is one of…
Advertising Disclosure.

Advertiser Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone. This article may contain links from our advertisers. For more information, please see our Advertising Policy.

default image

If someone told you it was a good idea to spend money on something you may not ever use, you might think they were giving bad advice. But with insurance, that is precisely what you may be doing. After your mortgage and auto/transportation expenses, insurance is probably your largest monthly expense.

Insurance is one of the few products you should gladly buy knowing full well you may never use it. Why? Because if you do need it, it’s there, and it will hopefully prevent you from going broke.

Which Types of Insurance Do You Need?

Which types of insurance policies do you need?Health insurance. Health insurance is one of the most essential forms of insurance you can buy. Just one hospital trip can run thousands of dollars, and a major illness can run tens of thousands or higher, depending on the necessary treatments.

To save money on health insurance, consider your needs and find a plan that gives you the maximum coverage at the best price. Consider looking at Individual Health Insurance vs. Group Health Insurance, a Health Savings Account, or Self-Employed Health Insurance.

Auto insurance. If you own a car, then you are probably required to have a basic amount of car insurance, whether it be full coverage or liability only. To save money on car insurance, you should only have full coverage if your car is valuable or you still have a loan on it. You can also raise your deductible to save on auto insurance rates.

Homeowners or renters’ insurance. Homeowners insurance is required if you have a mortgage on your property, as it protects the bank’s investment in you. You can save money on homeowner’s insurance premiums by increasing your deductible, combining other policies through the same provider, enhancing home security and shopping for low rates.

Renter’s insurance is often overlooked, but is a necessary form of insurance. Most people don’t realize they can purchase renter’s insurance for just a few dollars per month.

Life insurance. If you are single and don’t have anyone relying on your income, then you may not need life insurance. But if you have a family or other financial dependents, then life insurance is essential. There are many methods to determine how much life insurance you need, as well as several types of life insurance, including term life, whole life insurance, and variable life insurance policies.

Disability insurance or long term care insurance. These two forms of insurance are often overlooked, especially by younger individuals. But disability insurance can help you protect your most important asset – yourself. Many people also wonder if they need long term care insurance. It comes down to many factors, but you should strongly consider it as you get older, especially if you have a family history of health problems or are at high risk for certain health issues.

Specialized insurance. Consider your overall financial needs, and consider an umbrella policy or other special insurance program that can cover you in certain circumstances. You may also consider liability insurance if you own a business.

Types of Insurance You Don’t Need

Mortgage protection life insurance. Mortgage protection life insurance is similar to a term life insurance plan, but only pays out the balance of your mortgage in the event you die. Why is it a bad idea? Because you receive less coverage as you pay down your mortgage, but your premiums remain the same (essentially paying more each month for a lower payout). Many people would be better off just buying a larger term life insurance plan.

Pet insurance, travel insurance, and others. Many additional forms of insurance are sold as add-ons to people who haven’t planned their needs and are caught off guard when the insurance is offered. As with all things, do your research so you know exactly what type of insurance you are receiving, how much it costs and whether it is really necessary.

Get Instant Access
FREE Weekly Updates! Enter your information to join our mailing list.

Posted In:

About Ryan Guina

Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Illinois Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

Reader Interactions


    Leave A Comment:


    About the comments on this site:

    These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

  1. Devon says

    I keep my life insurance independent of my work place as suggested above. Deductibles on car and home insurance are usually really high so that I don’t get tempted to claim on a small damage. I’m saving for the emergency fund …have about 80% of my target savings there, still the thought of any untoward incident gives me the jitters. I have combined life, home and car insurance all with AARP to keep paperwork simple.

Load More Comments

The Military Wallet is a property of Three Creeks Media. Neither The Military Wallet nor Three Creeks Media are associated with or endorsed by the U.S. Departments of Defense or Veterans Affairs. The content on The Military Wallet is produced by Three Creeks Media, its partners, affiliates and contractors, any opinions or statements on The Military Wallet should not be attributed to the Dept. of Veterans Affairs, the Dept. of Defense or any governmental entity. If you have questions about Veteran programs offered through or by the Dept. of Veterans Affairs, please visit their website at va.gov. The content offered on The Military Wallet is for general informational purposes only and may not be relevant to any consumer’s specific situation, this content should not be construed as legal or financial advice. If you have questions of a specific nature consider consulting a financial professional, accountant or attorney to discuss. References to third-party products, rates and offers may change without notice.

Advertising Notice: The Military Wallet and Three Creeks Media, its parent and affiliate companies, may receive compensation through advertising placements on The Military Wallet; For any rankings or lists on this site, The Military Wallet may receive compensation from the companies being ranked and this compensation may affect how, where and in what order products and companies appear in the rankings and lists. If a ranking or list has a company noted to be a “partner” the indicated company is a corporate affiliate of The Military Wallet. No tables, rankings or lists are fully comprehensive and do not include all companies or available products.

Editorial Disclosure: Editorial content on The Military Wallet may include opinions. Any opinions are those of the author alone, and not those of an advertiser to the site nor of  The Military Wallet.