LOUISVILLE, Ky. (WDRB) -- Financial advisor, Mark Lamkin explains the three types of insurance everyone needs, and the two types you should avoid.

When it comes to buying insurance, there are so many options on the market today that you might feel overwhelmed and can easily be taken advantage of!

It's important to be covered, but you can also be too covered. Paying for too much insurance takes money away from other areas, such as your emergency fund and your retirement savings-and saving for retirement is much more important than being over insured.

So financial expert Mark Lamkin from Lamkin Wealth Management says there are THREE types of insurance everyone needs and TWO types I want you to avoid! So here goes:


Three types I want you to own

1. Life Insurance

No one likes to think about it, but life insurance is an essential component of protecting your family in the event that you pass before your time.

There are costs associated with dying, such as burial and mortuary fees. Further, if you are the primary breadwinner, life insurance will help your family to offset the lost income. The latter is the main reason that people get health insurance. The single and childless might not need life insurance, but everyone else should invest in a policy now. How much? A basic rule of thumb is ten time your annual income.

2. Health Insurance

The soaring cost of medical care is reason enough to make health insurance a necessity. Health costs are one of the largest causes of late stage bankruptcies that I have seen. Even a simple visit to the family doctor can result in a hefty bill. More serious injuries that result in a hospital stay can generate a bill that tops the price of a one-week stay at a luxury resort. Injuries that require surgery can quickly rack up five-figure costs. Although the ever-increasing cost of health insurance is a financial burden for just about everyone, the potential cost of not having coverage is much higher. With the affordable care act, there are many several options to choose from and your employer may help cover the cost as opposed to footing private insurance coverage if you ask.

3. Home/Auto Insurance

Replacing your home or car is an expensive proposition. Having the right insurance can make the process less difficult. When shopping for a policy, look for one that covers replacement of the item and contents in addition to the cost of living somewhere else while your home or auto is repaired.

Depending on the age of your home or auto and the amenities that it has, the cost to replace it could be more or less than the price you paid for it. To get an accurate estimate, find out how much comparable items are selling for.

Two Types of Insurance you don't need:

1. Rental car insurance

We've all been bombarded at the rental car counter by a salesperson trying to get us to buy extra insurance as we rush through a rental agreement. Chances are your credit card covers you if you're paying with one, or your auto insurer for your car you left at home covers rentals. Check with both companies before you leave home.

If you insist on having rental car insurance in case of an accident, one option is Protect Your Bubble. It sells rental car insurance for $8 a day, compared to the $30 or so the rental agency will charge you at the counter. The catch is you have to buy it ahead of time. The checkout counter, as many insurance companies know, isn't the best place for a consumer to make an educated decision.

2. Private Mortgage Insurance

The infamous private mortgage insurance (PMI) is well known to homeowners because it increases the amount of their monthly mortgage payments. PMI is an insurance policy that protects the lender against loss when lending to a higher-risk borrower. The borrower pays for this insurance but derives no benefit. Fortunately, there are several ways to avoid paying for this unnecessary policy. PMI is required if you purchase a home with a down payment of less than 20% of the home's value. The small down payment is viewed as putting you at risk of defaulting on the loan. Put down at least 20% and the PMI requirement goes away. Alternatively, you can put down 10% and take out two loans, one for 80% of the sale price of the property and one for 10%, although interests rates can prevent the economics of this maneuver from working out in the homeowner's favor. The second is simply Mortgage insurance sold by your bank or insurance company. The insurance amount goes down with your mortgage balance but your premium does not. In this case, your often better off buying a simple term policy and matching the term of your mortgage.


Lamkin Wealth Management

5151 Jefferson Blvd., Suite 102


901 Lily Creek Drive Ste. 102

office: 502-961-6550 Office

toll free: 866-961-6550

"Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and an Investment Advisor"

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