Despite our growing list of insurance types and providers, Australia remains one of the most uninsured first-world countries. Perhaps this is due to the fact that many Australians struggle to determine which types of insurance they really need. After all, each one puts a dent in your monthly budget, and isn’t necessarily offset by the potential payout.

To make this situation less of a dilemma, we need to understand exactly what each type of insurance provides. This will help you avoid taking out the wrong types of insurance, as well as potentially saving you from losing tens or hundreds of thousands of dollars due to not having the right insurance.

Life Insurance

As the main income provider in your family, it’s important to have the right type of life insurance to guarantee the future well-being of your loved ones when comes the time that you’re no longer around. While more affordable plans may not cover all of your family’s needs, they’ll go a long way in easing the load.

A good life insurance policy should cover your funeral costs, contribute to paying off what you owe for your home, provide a liveable income for your spouse and ideally cover any other living expenses that your family has. Be sure to extensively research local providers so that you can cover your family as much as possible.

Health Insurance

It’s no secret that healthcare can be extremely expensive, especially if you or a family member requires an ambulance, surgery or intensive care services. This makes health insurance a worthwhile investment, as it can significantly reduce what you or a loved one has to pay in the event of an emergency.

A good health insurance provider should be able to cover you and your family based on your needs. Services such as emergency ambulance transportation, accidental injury benefit and access to health professionals should be included. Australia’s best health insurance providers also offer additional services, such as extensive customer support.

Car Insurance

There are two types of car insurance that you can take out in Australia. CTP or compulsory third-party cover protects you from any claims made against you for personal injuries that were the result of an accident you were involved in. This is especially important these days, as insurance fraud is becoming increasingly popular.

The other type is comprehensive car insurance, which provides complete cover for the cost of damages done to your vehicle, as well as damages done to other vehicles involved in the accident, on top of cover for the injuries you sustained in the collision.

Home Insurance

Home insurance provides a payout to partially or fully cover the cost of damages done to your property and its contents in the event of a burglary or accident such as a house fire. The policies here tend to vary depending on how much cover you want, so this largely depends on your circumstances.

One would be extremely fortunate to not require an insurance payout of some kind for their entire life. At the very least, this is enough reason to consider obtaining the essential types of insurance policies.