5 Types of Insurance that are Essential for Families

As a decision maker in a family, you need to protect your family in various ways. One of these ways is by getting the right types of insurance. Some people are a bit unclear on what types of insurance are the most essential for families to have. The following are five suggested insurance types for families. While it is not absolutely necessary for every family to have all 5 types of insurance, these ones are recommended types that will stand a family in good stead as far as insurance coverage goes.

insurance for families

Health

Most people would agree that health insurance is on of the most important insurance types for a family to have. In the event of injury or illness, it goes a long way toward covering medical costs. Thus it insures you and your loved ones are able to afford the best medical attention should the need arise and also protects you from financial troubles that can arise from the unexpected.

Auto

If you and your family possess a vehicle, and most families do, insurance on that vehicle protects you not only in the event of accidents and breakdowns, but often for minor problems like flat tires and other roadside inconveniences. automobile insurance is not only a good idea, it’s required by law for all drivers. So this insurance type is one that is definitely required in all cases.

Homeowners or Renters Insurance

Most families occupy either houses or apartments. Homeowners or renters insurance is thus a very good idea and in most cases is legally required. This protects you and your family against events like fires and break ins. Specialized disaster types such as floods and earthquakes may require additional insurance types, but if you live in areas where these are a problem, they are essential to get as well. Special stipulations and riders can be added to ordinary home or renters insurance policies to add additional coverage for specific items such as family heirlooms or expensive electronic gear.

Life

Life insurance protects your family should you die and be unable to provide for them. It is thus potentially an extremely essential insurance type. It usually works in terms of a fund that is paid into over time and which is paid out when an individual, often a father or mother, dies. There are a number of affordable life insurance options available that can cover all sorts of important things following these sad events: funeral costs, living expenses, and education.

Professional/Business Insurance

Finally, as a family decision maker, you might consider various types of insurance that cover business ventures and professions. This will protect you in the event of dramatic changes in your income. This may take the form of unemployment insurance or some kind of more specialized business insurance. For instance, if you run your own contracting business and your family depends on the income from it, you should consider contractors liability insurance or workman’s compensation for it. Since you are not the only party affected by the vicissitudes of such a business, it makes sense to regard this as protection for your family as well.

These are types of insurance you should definitely consider if you a father, mother, extended family member, or other family decision maker. You may have children, siblings, elders, or other family that depend on you, and having the right insurance is the responsible thing to do. These 5 types are some of the most essential ones for family situations and thus you should pay due attention to them.

Anna is a blogger and mother of three children from Sydney, Australia. Being a mother, she knows the importance of protecting her family and she recommends these 5 types of insurance for all families.

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How Much Money Do You Really Need To Retire?

People who are approaching retirement age always want to know how much money they need to retire in security and comfort. This is a critical question that should be considered sooner rather than later.

retirement

Here are a few issues that could have an effect on your retirement:

How much will you need?

There is no simple formula that you can use to determine how big your retirement nest egg will have to be. Let’s say that your portfolio earns a yearly return of 5% and you want to raise your spending power by 3%, not illustrative to any specific portfolio or investment and ignoring any taxes. Of course, none of this is guaranteed.

During a 20-year period where your portfolio will end in zero, you will need a lump sum of $196,000 for every $1,000 per month that you want to have. Therefore, you need to have a lump sum of $1.96 million if you want $10,000 per month. If you are healthy and you feel like you may live for around 30 years in retirement, your present stream of money value needs to be $269,000 for every $1,000. If you assume a 6% return, but keep everything else the same, you will require a lump sum of $179,000 per $1,000 for a payout over 20 years. You will need $237,00 for a 30-year payout.

Your investment performance

Many investors have become more conservative because of the market events of 2008 and 2009. While this should not be surprising, many investors could now be considered too conservative. This is especially true for those investors near retirement age. Those retirees are now moving backwards in their purchasing power because of the current low interest rates, after taxes and inflation.

If we only look at inflation during 1991 to 2011 and ignore taxes, the loss in purchasing power has been 39%. This has caused a decrease in the standard of living for those who have conservative investment portfolios or who live on a fixed income.

Student loan burden

Student loans are another important issue that must be considered by retirees. I am not talking about their personal student loans. I mean the loans that the retiree co-signed for their children and grandchildren. It has become a troubling trend for young people to default on their loans and pass the financial burden to retirees.

Be realistic

Before you begin the process of figuring out exactly what your retirement number will be, you must understand that this number will be a moving target. Younger business owners that will not retire for a few decades will have many unknown factors that will have an impact on their retirement budget. These factors can be tax policies, medical advances that cause their lifespan to be longer and the quality of their health. A person should do a new set of calculations every few years to account for any new factors that have occurred.

The sooner you begin planning for your retirement, the easier it will be for you to adapt to any financial situation that may develop. Keep a close eye on current market trends and always be aware of what your investments are doing. This can ensure that your retirement is a peaceful one.

Chris is a Financial Planning Expert from Sydney, Australia. He recommends that everyone seek professional superannuation advice in order to have an enjoyable and prosperous retirement.

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