People face a number of risks in the process of daily living. People can generally cover many of them from current assets through self insurance, but here are six that People should consider insuring against.
Property Damage. This is the insurance people have on their car, home, and other personal property to repair or replace it if damaged by fire, storm, theft, or the negligence of someone else. When buying this type insurance, consider carefully the relationship between premium cost and deductibles. By assuming some of the risk through a higher deductible, people can reduce their premium.

Disability. If there is a 42-year-old man, he is four times more likely to become disabled for three months or longer before retirement than people who are to die. This can be devastating for their retirement plans. However, after retirement, people probably won’t need to continue this coverage. They must check it with their employer to see what coverage is available under a group plan. People may find they have sufficient coverage or they may need to buy additional insurance until they retire.

Death. Life insurance is an important part of an overall financial plan, but people must see it for what it is. They should not get led into buying life insurance as an investment. Sales commissions and administrative costs run high. In retirement, minimize coverage since they will have other assets to cover living costs for survivors. Look into converting existing whole life policies to paid-up insurance. If they have a policy that pays dividends, consider having the dividend applied to the premium. One insurance feature that is attractive to retired couples is the “second-to-die” policy. This policy provides cash to help with property taxes and thus eliminates the need to sell other assets when the property passes to children.

Medical Expenses. Everyone is aware of the high cost of medical care. A major illness
or injury could easily wipe out years of savings. Their employer or professional society may offer a group plan. If so, it is probably their best option. If people must buy medical insurance on their own, they must look for a high-deductible, catastrophic policy. Premiums are so expensive on private policies that people probably can only afford to insure against major risk.

Long-term Care. Only five percent of people between ages 75 and 84 are in nursing homes. However, the percentage increases to 19 percent in the 85 and over age group. Seventy to 80 percent of nursing home residents use up their capital in a year or so. Long-term care insurance is available to help with these expenses. Premiums for this coverage increase with age. So, if they are considering it, buy it before the age of 60. As with any insurance, tailor a policy to balance benefits and premiums. People should also include home care as well as nursing home care so they would not be forced to leave their home until they physically have to. An alternative to long-term care insurance is a financially sound life-care community. These communities, located throughout the country, provide care for residents as needed. Typically, there are three levels of care—independent living, assisted living, and custodial care. There is an entrance fee of several thousands and a monthly charge consistent with the level of care provided. While these communities are not inexpensive, residents are assured of the care they need throughout their lifetimes.