Insurance is a must in many cases but some of us choose to do without it since the monthly premium cuts into our bottom line. This is a huge mistake, having the right insurance should be part of our financial plans, but what is considered must have insurance?

Insurance policies everyone should own

Life insurance – I’ve actually come across people who don’t believe in life insurance. They figure once they’re gone, what does it matter? Life insurance isn’t there to protect us; it’s there to help our loved ones transition when we’re gone. Do you want your significant other to pay for the mortgage on a single income just because you were too selfish too selfish to get life insurance? How about your children? Don’t you want to make sure there is some money available in the event you pass early?

We can debate term vs. whole-life insurance another day but the point is; if you have any dependents, you should have life insurance. Even if you don’t have any dependents, life insurance can still give you peace of mind.

Disability insurance – We all understand the importance of life insurance yet many of us overlook disability insurance. Disability insurance is there to protect us in the event we are unable to work for an extended amount of time. It’s a must have insurance since it protects our greatest asset, which is our ability to earn an income.

Must have insurance

Travel medical insurance – We’re pretty lucky, as Canadians we don’t have to worry much about medical care since most things are covered by our provincial health plans. However, when we travel our health benefits don’t carry with us so getting travel medical insurance is a must. A 15 minute visit to the hospital in the U.S. could cost you a few hundred dollars; anything more serious could be a few thousand.

If you have a travel rewards credit card then you’ll most likely already have some travel medical insurance. If not, check with your employer as sometimes they offer free travel insurance as a standard benefit.

Travel medical insurance costs only a few dollars a day, even if you’re crossing the border for just a few days it’s worth getting insurance. To simply put it; if you can’t afford travel medical insurance, you can’t afford to travel.

Automobile insurance – There’s a simple reason why automobile insurance is a must have insurance; it’s illegal to drive without it. You might be thinking that the old junker you’re driving is not worth insuring but it’s not the value of the car you should be worried about, it’s the liability. If you get into an accident and you damage someone’s property, or cause personal injury; you could face huge bills or a lawsuit. Protect yourself and your wallet from the pain by not driving without insurance.

[icon name=”share” class=”” unprefixed_class=””] Related: How much car can you afford?

Must have insurance includes automobile insurance

Homeowners insurance – The odds are you won’t ever need to claim insurance for damage to your home but imagine the costs if you did? You never know when lightning or fire could strike so don’t skip out. The liability part of your homeowners insurance will protect you in the event your home causes damage to your neighbours e.g. flooding.

In the event of theft, your home insurance will cover your contents which will give you peace of mind. The cool thing about homeowners insurance is that it carries over when you’re travelling. So if you bring your laptop and camera on a trip and it gets stolen, you’ll still be covered. Just factor in the deductible and figure out if it’s really worth making a claim.

Final word

Technically speaking all of these policies are “optional” but you’re taking a huge risk by not having them in place. Protect you and your family by getting these must have insurance policies.

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Image courtesy: David Amsler / Stockpholio