Why Insurance Matters
Insurance transfers financial risk from you to an insurer. You pay a small, predictable amount (premium) to avoid a large, unexpected cost.
- Premium: What you pay monthly/yearly for coverage.
- Deductible: What you pay out-of-pocket before insurance pays.
- Copay/Coinsurance: Your share after deductible (health).
- Out-of-pocket max: The most you’ll pay in a plan year (health).
Common Types of Insurance
- Health: Covers doctor visits, hospital, prescriptions. Look at premium, deductible, network.
- Auto: Required in most states; liability (others), collision (your car), comprehensive (theft/weather).
- Renters/Home: Protects belongings and liability; home adds dwelling coverage.
- Life: Supports your family if you die. Term life is usually the simplest and cheapest.
- Disability: Replaces income if you can’t work due to illness/injury.
Choosing the Right Policy
- Match coverage to your risks (car, apartment, dependents, medical needs).
- Compare at least 2–3 quotes (price, deductible, limits, reviews).
- Bundle (auto + renters/home) to save, but still compare totals.
- Review yearly as life changes (move, job, marriage, kids).
Tip: A higher deductible lowers premium—but keep enough in your emergency fund.
Mini Exercise
- List the insurance you have (health/auto/renters/life) and what’s missing.
- Find your health plan’s deductible and out-of-pocket max.
- Get one new quote (auto or renters) and compare coverage + price.