Which Types of Insurance Do I Really Need?


In our Ask an Advisor series, members of Grow’s Financial Advisor Panel answer your money questions each week. Today, CFP Ken Moraif, senior advisor at Money Matters in Dallas, Texas, explains how certain insurance policies protect you and your loved ones.

Q: I’m in my early 30s, married and thinking of starting a family soon. What kind of insurance should I buy?

In addition to policies you probably already have—like health, renter’s or homeowner’s and auto insurance—the two most important types of insurance to look into are life and disability. Both are designed to protect or replace your earnings, which is likely your greatest asset right now. If you should pass away or become disabled, the insurance would continue providing for your family in your stead.

Many employers offer group life and disability insurance as part of their benefits package. But if you don’t have access to these policies through work, do some research and comparison shopping on your own. Sites like PolicyGenius, DisabilityInsuranceQuotes.com and Quotacy.com are good sources of information.

When it comes to disability insurance, a good rule of thumb is to replace at least 60 percent of your pay because that’s close to what you take home after taxes. Life insurance, on the other hand, is highly individual. A general recommendation is finding a term life policy that’s equal to seven to 10 times your salary, but the bottom line is that you need to enough to replace lost cash flow and support your family’s specific financial goals.

Grow Financial Advisor Panel participants are responsible for the content expressed and do not necessarily represent the views or opinions of Acorns Grow, Inc., Acorns Securities, LLC or Acorns Advisers, LLC. Content is provided on an informational basis and should not be construed as investment advice. Individual circumstances will vary. Please consult a financial advisor before acting on any opinions expressed. Participation in the panel is voluntary. Editing of advisor responses is for brevity and clarity; no editorial privilege is exercised.