Without the right insurance coverage, you could end up facing unexpected medical or repair bills, which can wipe out your savings or force you to turn to high-interest credit cards. However, deciding which policies you really need can be tricky.

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Here are five types of insurance to consider that can help cushion the blow when life knocks you down.

Health Insurance

Dennis Shirshikov, head of growth at Summer and a finance professor at the City University of New York, said that health insurance is arguably the most critical form of insurance, because medical emergencies can result in catastrophic expenses.

“Health insurance protects against the high cost of medical care, ensuring that a serious illness or injury doesn’t lead to financial ruin,” he explained. “Even with out-of-pocket expenses, having health insurance dramatically reduces the financial impact of healthcare costs.”

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Life Insurance

Randy VanderVaate, CEO and founder of Funeral Funds of America, said that life insurance can be the backbone of financial protection, no matter what stage of life you’re in.

“Life insurance is not just about covering funeral costs; it’s about securing your family’s future, paying off debts, maintaining their standard of living and leaving a legacy,” he said. “No matter your age or situation, life insurance is a crucial safety net that offers peace of mind and financial security when it’s needed most.

“Life insurance is often more affordable for temporary needs, while whole life offers lifelong coverage with a cash value component,” he explained. “Check the policy’s flexibility, such as the ability to convert or customize coverage later. Make sure the coverage amount reflects your family’s future expenses, like education and retirement, and don’t forget to compare premiums and benefits across multiple insurers to find the best fit for your budget and goals.”

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Homeowners or Renters Insurance

Shirshikov said it’s vital to protect your home or personal property with homeowners or renters insurance.

“Homeowners insurance covers damage to your home from events like fires or storms, as well as liability in case someone is injured on your property,” he said. “Renters insurance, while often underestimated, is equally important for protecting your personal belongings and providing liability coverage if you’re renting.”

The national average cost per year for homeowners insurance is between $1,150 and $3,068 for coverage amounts between $200,000 and $750,000, according to Forbes Advisor. The average cost for renters insurance is about $214 per year, according to QuoteWizard.

Auto Insurance

Even though car insurance requirements vary by state, most require you to have some type of coverage. New Hampshire is the only state that does not mandate car insurance.

“For those who drive, auto insurance isn’t just a legal requirement — it’s a financial necessity,” said Shirshikov. “It covers the costs associated with accidents, including property damage, medical expenses and legal fees, protecting you from potentially devastating out-of-pocket costs.”

Car insurance averages about $172 per month in the U.S., according to U.S. News & World Report.

Long-Term Care Insurance

Shirshikov pointed out that, as people live longer, the need for long-term care becomes more likely.

“Long-term care insurance helps cover the costs of care that aren’t typically covered by health insurance, Medicare or Medicaid, such as assistance with daily living activities,” he said. “This can be critical for preserving your savings and providing quality care in later life.”

The average annual cost for assisted living care is $4,500 per month, according to the National Council on Aging.

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Factors To Consider When Choosing Insurance Policies

“When selecting insurance policies, it’s important to consider both your current needs and your long-term financial goals,” Shirshikov said. Here are a few factors to keep in mind.

Coverage Amount

Shirshikov said to ensure that the coverage amount is sufficient to meet your needs.

“For life insurance, this might mean covering the equivalent of 10-12 times your annual income, enough to replace your income and cover major expenses like a mortgage or college tuition,” he explained. “For disability insurance, look for a policy that covers at least 60% of your income.”

Policy Terms

“Understand the terms of the policy, including exclusions, waiting periods and the duration of coverage,” said Shirshikov. “For example, with disability insurance, some policies offer coverage for only a few years, while others cover you until retirement age. Choose the one that aligns with your risk tolerance and financial situation.”

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Cost vs. Benefit

Shirshikov explained that, while it can be tempting to choose the cheapest option when buying insurance, it can be a mistake, because inadequate coverage can leave you vulnerable.

“For example, a low-cost health insurance plan might have high deductibles or limited coverage, leading to significant out-of-pocket expenses when you need care,” he explained.

Insurance Provider

Not all insurance providers are equal. Shirshikov recommended considering each company’s reputation and financial stability.

“You want to be confident that the company will be able to pay out claims when necessary,” he said. “Research the provider’s ratings and reviews, and consider their customer service quality, as well.”

Customizability

“Some insurance policies allow you to add riders or additional coverage options tailored to your specific needs,” Shirshikov explained. “For example, a life insurance policy might offer a rider that provides coverage for critical illnesses. Customizing your policy can provide peace of mind that you’re fully covered.”

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This article originally appeared on GOBankingRates.com: 5 Types of Insurance You Need To Protect Your Financial Future, According to Experts