Understand the Different Types of Insurance

Quick Look

  • In addition to health insurance, these are other major types of insurance to consider.
  • Depending on your situation you may not need all of these.
  • If a given insurance type seems relevant to you, click on the link and add that task to your action plan (logged in users only).


Significant Insurance Types to Consider

  • Lifeif you have financial dependents, you need this insurance. Most people get “Term” life insurance but a minority of people will get “Permanent” (sometimes simply called “Whole”) life insurance.
  • Autoif you own a car you need car insurance and the “Liability” component of car insurance is legally required in most states.
  • Homethis protects your home and may also provide a layer of liability protection for certain types of accidents – sometimes even ones that didn’t happen on your property.
  • Rentersthis can provide protection for your belongings, costs associated with water damage, temporary housing if your unit becomes unlivable, liability protection and more. 
  • Disability (LTDI)this provides a level of income replacement should you become disabled and unable to work. It may be offered through your employer.
  • Long-term Care (LTCI)this provides payouts for specific costs associated with skilled nursing or facilities should you require these for health-related reasons.
  • Umbrellathis provides an extra layer of liability protection (beyond what you may have with home or auto) in the event someone tries to sue you for an accident.


Your focus is to become financially independent and you have worked incredibly hard to reach this stage. But unforeseen events and accidents happen. If you’re not prepared, everything you’ve worked for can be put at risk in a matter of moments.

But here’s the good news: Each type of insurance listed above is easily understood, and easy to acquire. Additionally, relative to health insurance, these types of insurance are comparatively inexpensive.

Some of these insurance types can be purchased and bundled together with your traditional “Home, Auto, Life” companies (and bundling usually saves you money). Others can be purchased through your current employer. (Important: If the policy is paid through your paycheck it will become inactive when you leave that job.) Finally, some insurance types are most easily purchased through an insurance broker.


If any of the insurance types above might make sense for you, click their links to learn more. If you decide you need that type of insurance, add the task to your plan.

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