Dave Ramsey article from the Dollars and Sense section of the Knoxville News Sentinal
Q: I’ve got auto insurance, but can you tell me what other kinds of insurance are good to have?
A: The purpose of insurance is to transfer risk. Specifically, I’m talking about risk that you can’t afford to take. Most people can’t afford to have a heart attack and triple bypass surgery. Having to pay for something like that completely out of pocket would bankrupt just about anyone. That’s why health insurance is a vital part of any good financial plan.
It’s also important to have auto and homeowner’s insurance. If you don’t own a home, make sure you have renter’s insurance instead. Don’t forget about life insurance, either. If you’re married or have kids, you should carry eight to 10 times your yearly income in a good, 15- or 20-year level term life insurance policy. This means if you make $40,000, you should have about $400,000 wrapped up in life insurance.
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