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Ask Dave

The Essentials Of Insurance

Ruth wants to know what kinds of insurance are must-haves. Dave lists out the essentials.

QUESTION: Ruth on Facebook wants to know what kinds of insurance are must-haves. Dave lists out the essentials.

ANSWER: There are a lot of them, and there are a lot that you don’t want, too.

If you have a car, you get car insurance. If you have a home, you get homeowner’s insurance. If you’re a renter, you get renter’s insurance. Those are must-haves. Health insurance is a must-have, as well as long-term disability insurance. Short-term disability insurance is less important and I don’t buy it because I have an emergency fund.

If you are 60 years old or older, long-term-care insurance is a must-have. Don’t buy it if you’re under 60, though, because you have less than a 1% chance of staying in a nursing home if you are under 60 years old.

You want 10 times your income in level term life insurance. So if you make $50,000 a year, you want about $500,000 in life insurance. Never do investment-type insurance such as cash value because it’s a rip-off and never a good place to save money.

I don’t suggest double indemnity or accidental death insurance. You aren’t more dead if you die by accident. I don’t suggest cancer insurance because your health insurance should cover that.

Get identity theft protection. Zander Insurance is the only place I recommend for that.

Never do return of premium on any of your policies. These are the kind where, if you don’t use the policy, they give you your money back, but they charge you just a little bit more for the gimmick. If you pay that “little bit more” to yourself by investing it, then you’ll end up with a lot more than you would have ended up with from the return of premiums, whether you used the policy or not.

Watch out for those gimmick insurances; they’re the ones that get you. But you’ve got to take care of those big categories.