Five essential types of insurance coverage that will encourage American middle-class families to start thinking of insurance planning as part of their holistic financial picture.

Murphy’s law is a famous adage that states, “if anything can go wrong, it probably will.” For middle-class individuals and families, nothing could have been a more accurate statement than that adage. Despite an improving economy that should be easing the financial struggles of all Americans, a growing number of households are plagued by high debt and have little or no savings.

A recent study from Pew’ s Financial Security, and Mobility Project found a staggering number, 4 out of 5 (78%) of people, live paycheck to paycheck. The typical middle-class American family is not prepared for a major financial shock. The truth is that every family could replace 21 days of income with readily available funds, leaving it on thin financial ice in case of an emergency.

So, there is no doubt that the middle class is feeling the financial squeezed from every direction. Every day, Murphy’s law is knocking on our doorstep, ready to show its ugly face. As middle-class, insurance is the critical tool that can give you the safety net and peace of mind for when things go wrong. Below are five insurance coverages that I believe can have the most significant impact on middle-class households.

Life insurance

According to Life Happens,  a nonprofit organization dedicated to helping consumers take personal financial responsibility through the ownership of life insurance, less than 60 percent of Americans own life insurance; but 84 percent say that most people need it. Life insurance should be an essential component of the middle class’ overall financial fitness.

Life insurance is vital because it pays off any debts such as a mortgage, credit cards, car loans, and even your funeral expenses, which can have a dramatic impact on your family and their lifestyle. It protects families, businesses, and can also be a useful savings and investment vehicle. You should consider 10x of your income in life insurance coverage. For example, if you earn $50,000 per year, you should have at a minimum $500,000 in life insurance coverage.

Health insurance

Health insurance provides financial protection in case you have a severe accident or illness. However, rising costs for health care services and health insurance premiums represent a growing burden for the middle class across all age groups. The middle class is bearing the brunt of the rise in health insurance deductibles and medical bills.

Two-thirds of people who file for bankruptcy say medical bills or other issues related to illness contributed to their financial downfall. A horrifying 530,000 families turn to bankruptcy each year due to medical debts, according to a 2013-2016 study of court records of bankruptcy filers. The rampant growth in health care spending is crowding out other important priorities, such as saving for retirement and children’s education.

So, how can the middle-class cope with rising costs for health care services and health insurance premiums? First, try to educate yourself or inquire the help of a professional. Also, reach out to your HR and benefits personnel within your organization for help. Often time, the resources are available; it just takes a little effort on your part. However, whatever you do, it’s essential that you carry some coverage.

Disability insurance

Disability insurance is crucial because it provides a source of income to people who are unable to work due to an accident or illness. You are far more likely to become disabled during your working years than to die. For example, Females born in 1999 ( so they attained the age of 20, 2019) have a 24.8 percent probability of disability before age 65 and a 3.6 percent probability of death.

A study by the Bureau of Labor Statistics shows that only 39% of American workers had short-term disability insurance, and 33% had long-term disability insurance in 2014. Generally, people believe the odds are in their favor and that the main reason for filing a disability claim is due to accident or workplace injury. However, the leading causes are due to chronic disease—cardiovascular, musculoskeletal problems, and cancer. So, be sure to protect one of your most valuable assets, your ability to earn money.

Homeowner’s Insurance

The challenges that come with owning a home can be overwhelming, especially for those who are a first-time homebuyer. Hence, the reason why so many people give minimal thought to the homeowner’s insurance process. If something happens to your home, homeowner’s insurance can make or break you.

Homeowners, or property, insurance protects your house or other real estate from unexpected damage or malicious actions. If your home is damaged, vandalized, or robbed, the functions of insurance for your home are to provide funds, typically in the form of reimbursement, to repair or replace those items affected by the incident

When looking into homeowner’s policy, it’s essential to shop around. Contact at least three companies to compare coverage. It’s good to compare coverage, price, and customer reviews. However, importantly, be sure you get the right type and amount of coverage. For example, you may need to purchase additional coverage for flood insurance, and so forth.  However, most importantly, shop for value, not necessarily rock-bottom price.

Automobile Insurance

This type of coverage is designed to protect in the event of an automobile accident or other incident involving a motor vehicle. Even it’s the law for every driver to carry auto insurance coverage, not everyone follows that the law. One in eight drivers, was uninsured, according to a 2017 study (latest data available) by the Insurance Research Council (IRC).  Therefore, the probability of getting into an accident with a driver that is uninsured or underinsured is very likely.

However, consider this fact, more than 1 in 4 (26.7 percent) of drivers in Florida have no insurance. 27% of the time, if you get into an accident, you will be left with mounting debts, with no one to turn to.  Uninsured Motorist (UM) is the best option for protection against those drivers. It helps you pay for damages caused by a motorist who doesn’t have car insurance. If you’re hurt or your car is damaged in a crash caused by such a driver, this coverage will help pay for costs, up to the limits in your policy. Again, it’s essential to shop at least three companies to compare coverages. However, most importantly, shop around for value, not necessarily rock-bottom price.

The bottom line

Insurance is a great tool that brings peace of mind to the middle-class. It pays the insured (you), or the designated beneficiary when a covered loss is realized. Unfortunately, many individuals and families usually wait too late before they obtain insurance coverage or ensure their current coverage is adequate.

In these challenging financial times, you can’t afford to leave yourself, and your family exposed. It would be best if you control what you can; having adequate insurance coverage is one of the things you can control. As Martin Luther once said, you can’t keep the birds from flying over your head, but you can sure keep them from building a nest in your hair!