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yes
Health Insurance
Do you need it? YES. Even if you can't remember the last time you came down with a cold, that doesn't mean you're bulletproof. Health insurance guarantees you won't wind up drowning in medical debt after an unexpected illness or injury.
Consider:
* Temporary insurance: Being between jobs is no excuse for going without coverage. 'Forty dollars a month can get you a policy that lasts six months, and can be renewed three times,' says Peter Bielagus, author of Getting Loaded: Make a Million While You're Still Young Enough to Enjoy It. (Two companies offering good temporary policies are Anthem Blue Cross/Blue Shield and Assurant, he notes.) Under the COBRA law, you can also remain enrolled in your former employer's group plan for 18 months (visit cobrainsurance.com for details).
* Limited benefit plans: If your family's medical expenses tend to be minimal, these are a good bet--their premiums are roughly 80 percent lower than those charged by traditional plans. Be advised, though, that some are a bit too 'bare bones,' compensating you only for doctors' appointments and prescription drugs. You're best off with a plan that also covers emergency room visits and hospitalization. (Look into Century Healthcare's limited benefit plans at centuryhealthcare.com.)
* High deductible plans: If you're young and healthy, go for it. Your monthly payments will be quite low, but remember, says Bielagus, 'a high deductible means that you take on more of the risk.'
no
Pet Insurance
Do you need it? NO. Most vets offer flexible payment schedules, and some even consider their fees negotiable, says Pond.
Consider:
* A flat-rate plan: If you're the type who will do virtually anything for Fluffy, look for a plan with a flat, published premium rather than a rate that fluctuates based on a pet's age or breed. And note that many companies won't cover pets older than 10.
maybe
Life Insurance
Do you need it? MAYBE. If you're single and childless, or your kids are grown, you can opt out. But if you have dependents who count on your steady income, consider it.
Consider:
* Term coverage: Look for a policy that protects you for a fixed period of time (typically 5 to 20 years) and is payable upon the holder's death. Cash value insurance--which increases in value over time but allows benefits to be paid out before you die--is expensive, and only worth considering if you expect to be supporting a dependent for the rest of his or her life.
* Disability insurance: Before buying life insurance, make sure you have this. Your chances of suffering a disability during your lifetime are 1 in 4, and you're 7 times more likely to become disabled before the age of 65 than you are to die. A decent policy costs between $100 and $200 a year through most employers, and inexpensive coverage is also available through your local Chamber of Commerce.
yes
Homeowners Insurance
Do you need it? YES. You never know when the next wildfire or tropical storm could hit, destroying your most valuable asset. Consider:
* Replacement cost coverage: If your TV is totaled, you want to be reimbursed for the cost of a brand-new one, not for the cash value of the one you bought five years ago!
* Flood damage: It's not covered by your standard homeowners policy. 'Many people assume if their bank doesn't require them to buy flood insurance, they don't need it,' says Carolyn Gorman, vice president of the Insurance Information Institute. But that's simply not the case--and a full 90 percent of natural disasters in the U.S. involve some type of flooding!
* Renters insurance: If your belongings have been stolen or destroyed, your landlord probably won't cover the replacement costs. 'Renters insurance is actually extremely affordable, roughly $15 to $20 a month,' says Bielagus.
yes
Auto Insurance
Do you need it? YES. Not only is it required by law, but the Department of Transportation documented nearly 6 million motor vehicle accidents last year.
Consider:
* Uninsured and underinsured motorist coverage: It protects you if you sustain an injury in an accident for which an uninsured driver is at fault--and believe it or not, one in seven drivers is uninsured! While your health insurance should cover your medical bills, the additional coverage means you're also compensated for lost wages, as well as pain and suffering.
* Comprehensive and collision insurance: If your 8-year-old Honda has seen better days, you probably don't need it. Your insurer doesn't value your old vehicle, so even if it's demolished, you won't get a big payout. But if you have a new car or are still paying off a loan, it's a must!
* Asking for discounts: You may be eligible through your employer or professional organization, but you can also qualify for a cut if you've been accident- or violation-free for several years.
>q&s tip
Before signing a policy, check your state insurance board's Web site to see if there are any complaints against the company, advises Bettye Banks, senior vice president for Consumer Credit Counseling of Greater Dallas.
