Insurance is a must. Today, most of our major financial decisions involve buying or obtaining insurance. Before you can drive, you need to take out auto insurance. Before you can buy a new house, you need to have home insurance. Even when you buy your Apple device, you can opt for Apple Care insurance.

We are at risk every day. To manage or minimize those risks, we need insurance. It is the only way to protect ourselves against unforeseen events in the future.

For most of us, the topic of insurance can be very technical. There are many things you need to know regarding each insurance policy. There are hundreds of them and different types of insurance available in the market. Choosing the best one for us can be really difficult at times.

To help you with your decision, here are the 5 insurance policies you need to have.

1. HEALTH INSURANCE

This is the most important insurance policy we need for ourselves and our family. It gives us protection against hospitalization costs. Depending on where you are, medical costs can be a huge burden if you are not protected. Some wealthy nations provide this for free to their citizens. But for most countries, this is something they need to buy for their own protection. There are various types of health insurance available in the market. Make sure you choose the one that best suits your needs.

2. CRITICAL ILLNESS INSURANCE

Having health insurance is not enough. In the event of a critical illness, you may find yourself unemployed or taking a break for an uncertain period. If you have a critical illness plan, you can get a balloon payment to help you get through the recovery period. Although the health insurance pays the hospital bills, it will not give you any subsidy during the hospitalization. It is essential to have a critical illness policy in addition to your health insurance. Choose a policy that includes comprehensive critical illness on its list. Make sure it also covers all stages of diseases.

3. ACCIDENT INSURANCE

This policy gives us protection against accidents. In addition to accident medical coverage, it also offers a lump sum payment in case of accidental death or accidental dismemberment. Accidents happen and having an accident plan helps minimize those risks. Some medical policies do not cover outpatient treatment due to an accident. Having a separate accident plan is an advantage.

4. DEATH/DISABILITY INSURANCE

If you have a family that depends on you, you need to have this policy. It is a legacy that you can leave them in the event of an untimely death. When you get this policy, it usually covers both death and total disability. Grants a lump sum payment should either occur. Death coverage generally covers any cause such as accident or illness. On the other hand, total disability coverage is subjective depending on the insurance provided by the policy. They may have different interpretation or coverage in this part. Be sure to read your policy contract for more details.

5. INVESTMENT/RETIREMENT INSURANCE

Lastly, if you still have funds, take advantage of the investment or retirement policy. Once you have all other insurance policies in place to protect your risks, now is the time to plan for your future. Invest to grow your money and plan for your retirement. Most insurance companies offer many investment policies. Look at your past performance to help you decide which mutual funds can give you the best return on your money. Although past performance is not a guarantee of future performance, it will surely help in your decision.

Buying insurance is a long-term commitment. Do your own due diligence and don’t rely solely on the information provided by your agent. Understand the fine print and make sure you know the pros and cons and the types of health insurance you need. Schedule an appointment with more than one insurance agent so you can compare before deciding which one to choose.