This clean “Insurance: Need It or Skip It?” infographic is getting a lot of shares for good reason. Today I break it down with practical explanations, real-world context, and actionable tips so you can review your own policies with confidence.

1. Keep #1: Life & Health Insurance

These are the true essentials.

Major illness or unexpected death can financially devastate a family. In the US, medical bills are one of the leading causes of bankruptcy. Good health insurance protects against catastrophic costs, while life insurance safeguards your loved ones’ future.

Practical Tips

• Focus on adequate Out-of-Pocket Maximum in health plans
• For life insurance, start with affordable Term Life if you have dependents
• Consider Disability Insurance as well — it replaces income if you can’t work

Never skip these if you have a family or significant financial responsibilities.

2. Keep #2: Auto & Home Liability Insurance

This coverage protects the assets you’ve worked hard to build.

Car accidents or home-related incidents can lead to expensive lawsuits. Most states require minimum auto liability insurance, and home liability is a key part of homeowners insurance.

Smart Actions

• Set liability limits high enough to protect your net worth
• Review your Homeowners policy annually
• Consider Umbrella Liability insurance for extra protection once you have growing assets

As your wealth increases, this coverage becomes even more valuable.

3. Skip #1: Phone Insurance

Phone insurance is often one of the worst value propositions.

Monthly premiums of $10–$20 plus deductibles frequently make it more expensive than simply repairing or replacing the phone yourself.

Better Alternatives

• Self-insure: save the premium amount each month in a separate fund
• Use a strong case and screen protector
• Skip it especially if you buy mid-range phones or trade in regularly

Most people save money by dropping this coverage.

4. Skip #2: Extended Warranties

Extended warranties are statistically one of the biggest money traps for consumers.

Manufacturers design them to be highly profitable, and the majority of products never need repairs that exceed the warranty cost. Claims are often denied or complicated.

Why They Usually Don’t Pay Off

• High profit margin for the seller
• Many repairs still fall outside the terms
• Better to invest or save that money instead

Final Thoughts: Build a Smarter Insurance Strategy

The key to insurance is simple: protect what matters most and cut what doesn’t.

Keep Life, Health, and Auto/Home Liability to safeguard your family and assets. Skip Phone Insurance and Extended Warranties in most cases to free up cash for real wealth building.

Quick Action Plan

1. Pull out your current insurance documents this week
2. Check for overlapping or unnecessary coverages
3. Review liability limits and health plan deductibles
4. Cancel phone insurance or extended warranties if they don’t make sense

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Sources

• Essential Insurance Types: Investopedia
• Phone Insurance Value: Consumer Reports, WalletHub
• Extended Warranties Reality: Consumer Reports, Investopedia
• Auto & Home Insurance Guide: NAIC