Insurance is a strange beast: You spend a lot of money and get nothing back, unless your house burns down or some other tragedy befalls you, your loved ones, or your treasured belongings.
Still, insurance is a necessity -- even if we hope that we never need to take advantage of the coverage these policies offer. Even worse is not having the safety net you need. But a lot of people are unaware of some vital kinds of insurance that they should have.
We recently covered 15 kinds of insurance you may not need. Now here are eight insurance policies that could save you from headache, heartache and financial catastrophe.
1. Renters' insurance. Homeowners know that they need a policy to protect their domicile from costly catastrophes, but many renters don't think to insure their valuables. You may not own real estate, but your apartment does contain property that would be costly to replace in the event of a fire or water damage. A typical policy will cost around $150 per year to cover $30,000 in property and $100,000 in liability.
2. Antiques insurance. Whether you own a home or rent, your regular insurance policy may exclude certain property from coverage, such as antiques, or may not cover their full replacement value or restoration expenses. An antiques insurance policy can do that.
3. Longevity insurance. Many of us are doing our best to sock away money for retirement, hoping that it will be enough to last for the rest of our lives. If you live to a ripe old age, though, you face the risk of running out of money. Enter longevity insurance, which will start paying you a certain sum monthly once you hit a certain age, such as 85. It's relatively inexpensive, too, since many people won't need it or won't need it for very long (and the younger you are when you buy it, the cheaper it is, too). For example, MetLife (MET) recently offered a policy that a 55-year-old man could buy for $50,000 that would pay him $51,000 per year beginning at age 85.
4. Pet insurance. If Fluffy or Rover needs an operation one day, it will cost a pretty penny. Pet insurance, which typically costs up to a few hundred dollars per year -- but gets more expensive as the pet gets older -- can save the day. Many employers these days are offering this as a benefit; check to see if it's available to you, or look into whether it seems worth buying it on your own.
5. Business life insurance. Also sometimes called "key person" insurance, this can protect an entrepreneur's business if he or she passes away. It can be purchased for critical employees, and a set of owners might carry it on themselves so that if one dies, the insurance payout will cover buying out the deceased partner's stake.
6. Disability insurance. Disability insurance can be expensive, but that's because it's not such a longshot that you'll need it one day. Disabilities can be minor or major, temporary or permanent. Check to see if your employer offers it to you as a benefit and whether it will be enough for you. You may be able to pay more to boost your coverage, or you might want to buy a policy on your own.
7. Long-term care insurance. This policy will come to your rescue if you end up needing some in-home care as you get older or if you face nursing-home expenses. Policies can be pricey, depending on what they offer, but the younger you are when you buy them, the less expensive they'll be. You may only want to buy coverage that will pay you for up to three to five years, since less than 10% of people end up needing it for more than three years.
8. Wedding insurance. With the average wedding costing around $24,000 these days, it's worth looking into this coverage, lest a hurricane or a death in the family derails plans. These policies tend to cost less than $500, but be sure to find out exactly what is and isn't covered.
Skip the alien abduction insurance
The list doesn't even stop there. For most risks that you might imagine, there's probably insurance you can buy to protect yourself against it. Traveling in or moving to a risky, unstable country? You can buy ransom insurance, in case you're kidnapped. Make a living as a trombone player? You can insure your valuable arms, via body-part insurance. Have an expensive wine collection? That can be insured, too. In fact, thousands of people have even bought alien abduction insurance!
You're not likely to be abducted by aliens, but it's not so unthinkable that your apartment might catch fire or you might outlive your savings. Learn more about different kinds of insurance that could serve you well here:
- AOL DailyFinance Insurance Center
- The Motley Fool Personal Finance Nook
- The Insurance Information Institute