As you’re planning for your retirement, it’s understandable that your focus would be on saving and investing your money. After all, you need a nest egg in order to ensure a comfortable lifestyle in retirement.
However, it’s also important to insure the investments you’ve made in other ways, so that one unfortunate incident doesn’t cost you your entire financial future. Remember that nearly everyone needs to carry the following five forms of insurance:
Homeowner’s insurance. Your home is one of your biggest investments, and all mortgage companies will require you to purchase homeowner’s insurance in order to protect it. But once you’ve paid off your home and insurance is no longer required, you may be tempted to drop it. But don’t; the small premiums you’ll pay each year are well worth protecting such a large and important investment. Not to mention, the last thing you want is to lose your home and all of your worldly belongings after you’ve retired and have limited ability to replace them.
Auto insurance. Many people who have paid off their vehicle loans are tempted to skip auto insurance. But keep in mind that the insurance doesn’t just cover the car itself. If you’re found liable for an accident, your auto insurance covers you in the event of a lawsuit which could otherwise cause financial ruin.
Health insurance. Your health is really your biggest investment. Without good health, you may end up unable to work, and you could face high medical bills at the same time. If your job doesn’t provide health insurance, purchase your own through the health insurance exchange established by the ACA.
Disability insurance. Once again, your ability to work is the key to your financial future. If you become disabled and unable to work, disability insurance will ensure that you are able to continue paying bills and preparing for the future. This is particularly important if you’re the sole breadwinner in the household, or earn a much higher salary than your partner.
Life insurance. Life insurance protects your spouse and children in the event of your death, and covers final expenses like funeral costs, unpaid debt, and legal fees. Without life insurance your spouse could face suffer financial hardship, especially with regard to retirement.
