Bankrate offers a list of the 10 commandments of personal finance that I'll be sharing with all of you as well as providing my thoughts on their selections. The commandment for today:
VII. Thou shalt protect thyself against risk
There are numerous risks in this world, many of them financial. Sweeney believes it's important for people to have the right insurance, such as health, life and disability, to protect themselves and their families. In addition, they need car, home and even renters insurance. A new survey by Apartments.com indicates that 58 percent of their respondents do not have renters insurance.
I agree. Having insurance is a key part of sound money management. The types of insurance you'll need include:
1. Disability insurance.
2. Life insurance.
3. Homeowner's insurance.
4. Car insurance.
5. Umbrella insurance.
6. Medical insurance.
Did I miss any? (Maybe long-term care insurance?)
For related thoughts on this topic from Free Money Finance, see these posts:
If you're not a homeowner, you should have renter's insurance!
Posted by: MissPinkKate | January 29, 2008 at 05:19 PM
what about pet insurance? these days, this is becoming more of a necessity with veterinary medicine making leaps and bounds - things that were once regulated to humans are now available to pets. i just shelled out $2,500 to pay for my best friends treatment for liver failure and I still lost him. That was a serious hit to my savings account. just something to consider.
Posted by: mtnclmbr123 | January 29, 2008 at 05:53 PM
Identity Theft. Either insurance or just be aware of balances ,personal information ,etc.
Posted by: Lawrence | January 29, 2008 at 06:40 PM
Many advisors suggest looking into purchasing LTC insurance in your early 50s. That's when my husband and I both purchased it. My SIL tried at age 55, but by then she had colon surgery (non-cancer-related). She got TURNED DOWN by everyone. You absolutely have to have this insurance in place before you begin to show age-related decline, or they'll just say no.
Our mothers both purchased it and have both used it fully. It saved them many, many thousands of dollars.
Posted by: Katy Raymond | January 30, 2008 at 08:07 AM
I think you should also address that there are some types of risk that are taken when investing. Granted you want to minimize your risk versus your return, but diversification can passively protect you against risk, while learning and gathering information and experience can actively protect you against risk in your investments.
Posted by: Neal | January 30, 2008 at 12:11 PM
...and index options can protect your portfolio against risk. (not that I do it myself, but I should.)
Posted by: Bronco | January 30, 2008 at 12:25 PM