One of life’s harshest realities is that we can never turn back time. Along with this is the fact that there is an infinite number of events that might go wrong that we might not be prepared for. Sometimes, it’s less severe, but sometimes, these events can really make a dent in our wallets, so much so that it completely impacts our lifestyle.
That’s what insurance products aim to solve. Terrible events come few and far between, but all it takes is one to send your personal finance in a downward spiral. So, think of insurance as this protection for your wallet and use the right types of insurance to save you that time and trouble.
The way insurance works is through the exchange for money (premiums) in return for coverage. But before you dive into signing up for insurance coverage, make sure that it makes sense for you to do so. To help you with that, here are six types of insurance you need but may not have.
1. Life insurance
If you’re still in your 20s, living with your parents, or don’t have anybody depending on you, then you can probably skip life insurance. But if someone else might be in trouble in the case where something unfortunate happens to you, then this policy is a must.
Life insurance is a lump sum that will be transferred to your dependents in the event of your death. As to how much that amount is, that depends on you. It then breaks into two subcategories — Term life insurance and whole life insurance.
Term life insurance
As the title suggests, term life insurance covers only a specific number of years as long as you pay your premiums and keep your policy alive. However, the catch is the premiums may get more expensive as you get older.
Whole life insurance
As the title suggests again, whole life insurance covers your entire lifetime and may also come with benefits such as savings or investment accounts that are associated. The cash value in these accounts may get credited to you over time, but this type of insurance may come at the cost of a more experienced premium.
2.Permanent disability insurance
Permanent disability insurance covers you by replacing your income in the event where something happened and you’re unable to work due to permanent or temporary disability. When compared to life insurance, it’s always a good idea to get disability insurance to ensure you have a means of surviving.
Many employers do provide this as one of their employment benefits as they can also lower their costs during the period in which you’re unable to work. As general advice, it’s best to pay a small amount of premiums to avoid tapping into your emergency funds.
3. Renter’s insurance
If you’re renting at the moment, you’re not responsible for the building itself or for any major repairs—your landlord is. But you still ought to consider a renter’s insurance as it covers your valuables within the property.
Breaking it down, renter’s insurance protects you from disasters like flooding, fire, earthquakes, and break-ins. Keep track of how much your items such as electronics and musical instruments cost because you don’t want to overpay for the protection. If your items are not too expensive, then it wouldn’t really make sense to pay those monthly premiums.
4. Homeowner’s insurance
A homeowner’s insurance is the opposite of a renter’s insurance. The idea is that you can never be too careful because major events don’t come with any warning. And the rule of thumb is, unless you can replace every single item in your property easily, you should get homeowner’s insurance.
Typically, it covers the physical structure of your property, such as the walls, roof, fixtures, fittings, and outbuildings. But in addition to that, you might also want to consider the add on such as mortgage loan insurance, landlord insurance, home maintenance cover, and even the Malaysian special insurance labelled “Kampung House Insurance”.
5. Identity theft insurance
As you already know, we’re only at the beginning of the digital era. That means the number of fraudulent accounts, scams, and identity thefts has yet to reach its ceiling. Identity theft is when someone else uses your personal information to either embezzle your funds, commit fraud, or criminal acts.
Because it’s your identity that is used to commit these acts, you’ll be the first suspect during the investigation. What comes after is the cost of handling this issue, lawyer fees, and possibly more.
An identity theft insurance aims to help cover this cost for you. It may even save you hundreds or thousands along with countless hours in an event like this.
Besides all of these, car insurance is something you should compulsorily have if you own a car. Without it, you wouldn’t be able to renew your road tax. You can find out more about car insurance here: