Your income
Most workers have no federal sick pay or disability benefit for short illnesses. A few states, including California, New York and New Jersey, pay temporary disability benefits, and some states require paid sick leave. Social Security Disability Insurance only pays for long-term disabilities that stop you working.
Disability insurance fills the gap. Many employers offer short-term and long-term disability cover: check yours before buying your own.
Health
Most people get health insurance through their employer, Medicaid or the ACA Marketplace. Open enrollment for 2027 plans runs from November 1, 2026 to January 15, 2027: sign up by December 15 for cover from January 1. The extra premium help that applied until 2025 has ended, so premium tax credits again stop at 400% of the poverty level. The ACA subsidy calculator shows what you’d pay. On Medicare, higher incomes pay more for Parts B and D: see the IRMAA calculator.
Health insurance words, explained
| Term | What it means |
|---|---|
| Premium | What you pay every month for the plan, whether you use it or not |
| Deductible | What you pay for care each year before the plan starts paying |
| Copay and coinsurance | Your share after the deductible: a set fee, or a percentage of the bill |
| Out-of-pocket maximum | The most you pay for covered care in a year; the plan pays the rest after that |
| In-network | Doctors and hospitals that have agreed prices with your plan: usually far cheaper |
A plan with a low premium usually has a high deductible. If it qualifies as a high-deductible health plan, you can pair it with a tax-free HSA.
Life insurance
Term life insurance pays out if you die during the term, and is usually cheap if you’re young and healthy. Many employers include some life cover, often 1 to 2 times your salary, but it ends if you leave.
A common starting point is enough to clear your debts and cover your family’s living costs for several years. Term life insurance for a fixed number of years is usually much cheaper than whole life insurance. The life insurance calculator works out how much cover you need.
Home, contents and car
Car insurance is required in almost every state, and your mortgage lender will require homeowners insurance. Standard policies don’t cover floods: flood insurance is separate, through the National Flood Insurance Program or a private insurer. If you rent, renters insurance covers your belongings and your liability, and is usually cheap.
Umbrella insurance adds extra liability cover, often $1 million, on top of your home and car policies. It’s usually inexpensive and worth considering once you own a home or have savings someone could sue for.
What you can usually skip
- Extended warranties and gadget insurance: an emergency fund does the same job, and you keep the money if nothing breaks.
- Cover you already have: check what your job, bank account, credit card and existing policies include before buying more.
- Low deductibles: choosing a higher deductible lowers your premium, if you could pay it.
Paying less
- Shop around at renewal, rather than letting a policy roll over.
- Tell the truth on applications: a claim can be refused if you didn’t mention something.
- Review your cover when life changes: a new job, partner, baby or home.