Let's look at some examples. Life insurance, for example, is something you need if have a spouse and children, However, for a single person, it does not matter as much.

Disability insurance, which provides an income stream if you are unable to work, is important for everyone, but only if you can afford it.

The following are some of the insurances you should have to be covered as far as personal finances go:

Auto insurance: This is required by law, but it is also important for your personal finances because it protects you from damage to your considerable investment-your car. It also protects you from liability for damage or injury caused by you when driving.

Auto liability: This is coverage that anyone who owns a car should have. Cut costs by choosing a higher deductible, and make sure you have higher coverage then the minimum requirement suggests.

Homeowner's insurance: You ought to get enough to allow you to rebuild and refurnish your home if a catastrophe should happen. You should also get enough to protect you from lawsuits if someone is injured on your property.

Liability insurance: This is sometimes called umbrella liability coverage. It is insurance that covers any liability that your other insurance policy does not cover.

Life insurance: This is insurance that is payable when you die, so it does not protect you, but can provide a surviving spouse, children, and other dependents with money to maintain the standards of living, can help repay debt, and can fund education etc. So, evaluate your situation, and determine what amount of insurance you need.

Disability income insurance: This is insurance that will replace a portion of your lost income when you are unable to work for an extended period. Some employers cover their employees with some form of company-paid disability income insurance, but extra disability is important as well.

Health insurance: This is important because if you were to get sick, or injured, etc. you will want to make sure that you had insurance to help offset the costs.

Long-Term care insurance: This is insurance to cover the cost of nursing home or at-home health care. This is only smart to get if you can afford the premium, and will be able to continue affording it as you age and your income decreases.

Obviously the insurance needs you have will vary based on your family, age, and economic situation, and not every kind of insurance, or amount of insurance is right for you. However, having insurance is essential to having good personal finances, as without it, a problem or catastrophe could put you so far behind you would never be able to catch up.

Shop around for good rates on insurance as not all insurance policies and prices are created equally.