Life insurance is something a parent will tell you is a must. Try paying a doctor visit, not to mention an emergency-room visit, without health insurance. The law requires auto insurance, which is a good thing given the number of accidents per year. Insurance is a staple, but how much we pay for it is another question.

Insurance is a must, but like everything else, there are ways to optimize. The first thing to look at in your budget is unneeded insurance.

Insurance to Avoid:

1. Full Auto Coverage for cars that have little or no value is useless. Repairing a car is expensive, and if the car can be easily replaced, why pay to have it covered? Put this savings back for when the car needs repair or for the next car purchase.

2. Rental Car Insurance if you have a current full coverage policy, it should cover rentals (check your policy to be sure). Most rental companies make the majority of their profit from selling insurance that is many times unneeded.

3. Life Insurance is usually a need, but if you are single and have no children or other dependents, there is no need. If you have kids, it is also unnecessary to cover them.

4. Credit Card Insurance on outstanding card balances is a money making opportunity for the carrier that is hard to claim for the holder. Even if there is a claim, it can be hard to get the benefits paid with the number of loopholes in many policies.

5. Extended Warranties are offered on many purchases, especially electronics. Most of the time the policies equal a fair percentage of the purchase price, and often do not cover loss or accidental damage. Most of the time it is better to save the money and replace the product down the road if it is ever necessary.

Avoiding the above insurance is important, but insurance as a whole should be taken seriously. Deciding what, who, and how much, is still tricky. Here are some areas to focus on protection for the dollar:

Insurance to Buy:

1. Health Insurance is a must have if you are single, married, or have kids. Everyone has to see the doctor from time to time, and unfortunately emergencies do arise. The cost of healthcare can be staggering without it, so this is a must for all. Most employers offer benefits to employees, so start there when searching for a policy that fits. Research the best policies and prices if paying out of pocket.

2. Life Insurance is also very important, but not everyone needs it, and coverage needs vary. As discussed above, those with no dependants do not need coverage. However, those who do need it should select carefully. The breadwinners in the family need the most so the dependants can replace that income should the unfortunate happen. Protection levels should correlate with income. Some family members, such as those who stay home to take care of kids, should also have some level of coverage but probably not as much as the breadwinners. Children do not need coverage.

3. Auto Insurance is required by law, and can protect against the unthinkable. Your fault or not, accidents happen. Protect yourself against accidents that could be your fault, or the fault of uninsured motorists on the road. The level of protection can change pending the value of the car you drive.

4. Home Insurance is a must to protect what is probably the most important asset you will ever own. There are a number of things, from floods to fire, that can threaten your home. It can also protect you against unexpected accidents that happen on your property. Renters may also need a level of insurance, but this commonly goes over looked. Policies can vary and need to be researched. For example, some policies do not cover floods, and others do not cover earthquakes. Make sure you have protection that fits your region.