Insurance you actually need (and the policies you can skip)
A practical stack: health, auto/renters or homeowners, disability, and term life if people depend on your income. What is usually a skip.
Updated 2026-09-08 · 9 min · Educational, not advice
Cover catastrophes, not inconveniences
Insurance is for losses that would change the shape of your life: medical bankruptcy, a totaled car you still owe on, a fire, a disability, a death that leaves dependents without the paycheck. Extended warranties, accidental-death riders, and most identity-theft upsells fail that test.
Health: required in practice even when the mandate is quiet. High-deductible plus HSA can be rational if you can fund the deductible.
Auto: liability at least; comprehensive/collision if the car is new or financed.
Renters or homeowners: the building is not the only loss — clothes, a laptop, liability for a guest.
Disability: long-term, if you have earned income people depend on (including your future self).
Life: term, if someone would be in trouble without your income or if a mortgage would crush a survivor.
Raise deductibles when the fund exists
Once the emergency fund can absorb a $1,000–$2,500 hit, higher deductibles usually lower premiums by more than the extra risk. That is how insurance and cash work together instead of duplicating each other.
FAQ
Whole life or term life?
For income replacement, term is usually the cheaper way to buy a large death benefit while kids are young. Permanent policies bundle insurance with a savings-like account and high fees; run the numbers before you treat them as investing.
Is disability insurance really necessary?
Your ability to earn is often your largest asset. Employer short-term coverage is thin. Long-term disability that replaces ~60% of income, with an own-occupation definition if you can get it, is the unsexy policy that actually pays when a back or a brain goes wrong.