Once you have accumulated some assets, it is very important for you to protect those valuable possessions. One way that people do that is by buying insurance. If you take out a loan for a house or car, the institution that loans you the money will insist that you take out enough insurance to pay them what you still owe, if something happens to you, or to “their” property. Yes, it is their property until you completely pay off the loan. That insurance, which is built into the monthly payment you make, only protects the lender, and you will not get any money, if something happens to it.

In order for you to protect yourself, you will need additional insurance. First, you need to make sure that you have health insurance. A serious illness or accident can cost thousands of dollars, and as long as you have any assets, you will be expected to pay those bills, even if it takes years. Unless you are covered under your parents’ policy, you can buy health insurance very cheaply, if you are in college. Most colleges require that you prove you have some kind of health insurance coverage. If you are employed, you may have some health insurance as part of your employer’s benefit package. If none of these possibilities fits your situation, you need to find a way to purchase health insurance. If you have health coverage, DO NOT miss a payment! Doing so gives the insurer the opportunity to drop your coverage, and the next time you apply, your rate will be higher because you have exhibited “risky behavior” by missing a payment with another company.

If you have children or another family member who is depending on you for support, you definitely need to buy term insurance. You can purchase a lot of term insurance protection for very little money if you are young and healthy. Most sellers of insurance will try to talk you into “cash value” or “whole life” insurance. That is a good deal for them, but not for you, so stick with term with a “waiver of premium” rider. If you become disabled in the future, a “waiver of premium” will make sure the premiums are paid until you can again afford to make them.

If you are self-employed, it is a good idea to buy some form of disability insurance. Whether short term, or long term, disability insurance will pay you directly if you become ill or injured, thus allowing you to pay your basic bills while you are not working. Having disability insurance is even more important if you are also supporting someone else.

While you are still young, you may not have a lot of furniture, jewelry, or other possessions. If you do have valuables, it is a good idea to purchase tenant or homeowner’s insurance so that if they are lost, you have money to replace them. This type of insurance is usually very cheap.

If you are an heiress, or if you win the lottery and have a lot of money and possessions, you should consider buying a liability policy. Sometimes referred to as “umbrella coverage,” you can purchase a million dollars worth of insurance for a small amount of money because chances are, you will never be sued. But, if you are sued, you will be really glad that you have liability protection.

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