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The types of insurance I have

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Barry Choi

February 17, 2021
Saving strategies
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When it comes to insurance, most people only think about health, home and auto insurance. It’s no surprise since those are the most common types of coverage, but is that all the insurance you need?

It depends on your personal situation and how important you value things. Someone who has excellent work benefits may not need any additional insurance, but a self-employed individual will likely need multiple insurance policies.

As a husband, father, freelancer and traveler, these are the types of insurance I have and why I think it’s worth paying the premium to ensure I’m protected.
 

Life insurance

Although life insurance is pretty straightforward, it can also be a bit complicated due to the different options available. When my wife and I bought our condo, we made sure to get life insurance right away as we knew payments would be difficult if one of us were to suddenly pass away. The loss of your partner is devastating and worrying about making your mortgage payments is the last thing you need to deal with at such a difficult time.

We chose a term life insurance policy that would cover us for $500,000 each. We wanted this amount because it would cover the balance of our mortgage, funeral costs and provide a payout that would put any future children through school. Our term was for 20 years as we figured the mortgage would be paid off by then.

We waited until we bought our home before we got life insurance policies. We didn’t think it was necessary to get insurance when we didn’t have any significant debt or any dependents. Some people prefer to get life insurance when they’re younger since it’s cheaper.
 

Disability insurance

What many people don’t realize is that your ability to earn an income is based on you being physically able to work. In other words, if you’re not working, you can’t make money, which is why disability insurance is so important. This type of coverage will provide you with an income if you’re unable to work for a qualifying reason.

As soon I went freelance, I made getting disability insurance a priority. There’s only one problem, as a freelance writer, getting disability insurance is not easy. I had to prove I had consistent income for two years before I would even be considered for a policy.

For the following 24 months, I was terrified. If I got into an accident and couldn’t type or use my arms, my income would go down to zero. Sure, I had an emergency fund, but a disability could last a long time. I did not want to be in a position where I ran out of money and was unable to work.

After waiting two years and talking to various insurance brokers, I was finally able to get a disability insurance policy. My monthly premiums are higher than my life insurance, but I think it’s worth it.
 

Travel insurance

I always tell people that if you can’t afford travel insurance, you can’t afford to travel. What many people don’t realize is that travel insurance comes in many different forms. The most common is travel medical insurance, which is arguably the most critical type of travel insurance. Travel medical insurance covers your costs if you need medical attention when you’re travelling outside of your home province or the country. Depending on what country you’re in, a trip to the doctor or hospital could cost you hundreds or even thousands of dollars, which is why you want to make sure you’re insured.

The other types of travel insurance include things such as trip cancellation/interruption, flight delay, lost, stolen or delayed baggage, car rental theft & damage, hotel/motel burglary and travel accident. While some people are comfortable travelling without these types of insurance, I would never do so.

I’ve had more than one occasion where my flight or baggage has been delayed, and the insurance saved me a lot of money. As soon as I met the conditions of my policy, I knew that any meals, necessities and hotel expenses would be covered by my insurance.

There was also a time during a trip when I needed to rebook a flight due to an unforeseen event. Since I had trip interruption insurance, I was fully reimbursed for the airfare and any non-refundable travel purchases that were still outstanding for the trip.

The cost of a comprehensive travel insurance policy is about $200-$300 a year, and often premium credit cards include it for free.
 

Final thoughts

Some people think insurance is not worth the premiums you’ll have to pay, but I know it’ll protect me and my loved ones if I ever need it. It’s important to understand what types of insurance are available, so speak to an insurance professional who can provide you with appropriate information.

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Barry Choi - Author bio

Barry Choi is a personal finance and travel expert who makes frequent media appearances in Canada. You can follow him on his personal site at moneywehave.com or you can reach out to him on Twitter: @barrychoi