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I get it. Nothing kills the vibe faster than the word “insurance”. But alas, we cannot be chill vibes and good feelings all the time. Occasionally, we need to deal with horrible things like explosive diapers, Common Core math, and insurance. We all know we need insurance, but what types exactly? How much should you have of each? Why is this so hard!? Fortunately and unfortunately, insurance is often the unsexy super hero swooping in to save the day.

There’s A LOT to know about insurance, but ain’t nobody got time for that.

Instead, I’m going to give you the quick and dirty insurance cheat sheet. Let’s get to it:

Why You Need It: Our American healthcare system has more flaws than I can count. As we know, the prices of medical procedures, medications, scans, etc. are astronomical. Without insurance, you may be looking at a million dollar bill. I wish I were exaggerating, but I know multiple people who have held seven-figure medical bills in their bare hands. Health insurance is a must. You still might be stuck with a massive bill, but perhaps it’ll save you from financial catastrophe.
How Much You Need: Enough to cover regular checkups and “oops” moments without leaving you in medical bankruptcy. Pick a deductible that matches your family’s actual doctor habits (if you’re in there weekly, don’t cheap out on coverage). Generally healthy and not in need of many doctors visits? You can probably raise your deductible to lower your premium. But if you’re someone with medical needs, chronic illness, upcoming surgeries, etc., you probably want that lower deductible with the higher premium.

Why You Need It: If someone is relying on your income, you need life insurance. If you’re married, it’s a good idea. If you have children, it’s a must. Stick with term insurance (20-30 years is great). Whole life isn’t right for 99% of people. And one last thing that’ll piss the insurance salespeople off… whole life insurance is NOT. AN. INVESTMENT. Buy insurance for the insurance. Invest in better products. There’s a time and a place for whole life, but again, 99% of folks only need 20-30 year term.
How Much You Need: A solid rule is 10x your annual income, plus whatever’s left on the mortgage and future college bills. You should also think about if you want to financially take care of your children until a certain age - 18, 20, 25, 30? The healthier and younger you are when you buy term life, the cheaper it’ll be. Don’t wait.

Why You Need It: You’re way more likely to get sidelined by illness or injury than to suddenly die young. Yay?? Disability insurance keeps income flowing if you can’t work. It’s shocking how many people end up needing disability insurance at some point in their life.
How Much You Need: Shoot for about 60% of your paycheck. That’ll keep the bills paid while you recover. Most employers offer disability, so be sure to understand what you’d receive and that you’re actually enrolled. If you’re self-employed, disability insurance can be quite costly, but you should really consider it. Again, if people are relying on your income, you need to protect yourself and your family.

Why You Need It: Fires, break-ins, or that time your neighbor’s tree decided to visit your living room. This covers your actual home, your stuff, and you if someone takes a nosedive off your deck.
How Much You Need: If you own a home, you need enough to rebuild (this is NOT Zillow’s market value). If you own or rent, you also need adequate personal property coverage. This is coverage to replace all your stuff - furniture, electronics, clothes, literally everything inside your house that can be removed. This is where I most often see a lack of coverage. We underestimate the total value of our stuff! You also need liability coverage in case someone gets hurt in your home or tries to sue you. As your net worth grows, so should your liability coverage (liability coverage + umbrella coverage = covering your net worth = a pretty decent rule of thumb)

Why You Need It: Because other drivers exist. Also: deer and teenagers.
How Much You Need: State minimums are not a great gauge of what you need. Go for at least $100k/$300k in liability, plus collision and comprehensive if your car is worth more than my 1996 Nissan Sentra (the COOLEST little blue car in the Drury parking lot 20 years ago, I might add).

Why You Need It: If someone sues you (dog bite, trampoline injury, car crash), umbrella coverage kicks in once your home or auto policy taps out. It’s essentially extra security for pretty cheap.
How Much You Need: $1–2 million is standard and surprisingly affordable. Think of it as lawsuit bug spray. Your entire net worth should be covered under the umbrella policy.

Why You Need It: Nursing homes and in-home care cost a fortune. You don’t need this while you’re still knee-deep in diapers, but Future You (in your late 40s-early 60s) will want to consider it.
How Much You Need: Not all LTC policies are created equal. In fact, many of them are complete garbage. This requires some due diligence before you purchase. Ultimately, if you can find a policy to cover 3–5 years of care so you don’t drain your entire nest egg, that would be great.

Insurance is like flossing. Nobody wants to deal with it, but if you skip it your dentist will shame you into oblivion you may be in a world of hurt later on. Start with the essentials: health, life, disability, home/auto and then layer on the extras as your family (and assets) grow. You can’t plan for everything, but you can make sure one broken arm or fender bender doesn’t ruin everything you’ve worked so hard for.

I’m building out my favorite resources and recommendations on the Cents of Humor website! When I’m finished I’ll send you all the link. For now here are a few of my faves:

My favorite parent-controlled debit cards for kids and teens - Greenlight

My favorite budgeting tool - Monarch Money

My favorite retirement planning tool - Boldin

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