Insurance

The primary purpose of insurance is to transfer risk from major catastrophes from you to the insurance company. Insurance is not a wealth building tool. Therefore, avoid insurance plans that have a savings component built into them.

Basic types of insurance:

Auto

    • Consider raising your deductible to reduce your premium if you have an emergency fund.
    • Carry adequate liability insurance
    • Consider dropping collision with older vehicles

Homeowner’s or Renter’s

    • Make sure if possible you get guaranteed replacement costs
    • If you rent, get renter's insurance
    • Make sure you know the maximum benefit of your policy versus the value of your home.

Health

    • This is constantly changing. Contact an Endorsed Local Provider that is able to help you choose the plan that is right for your family and financial situation.

Disability

    • This is meant to replace income that is lost due to a short term or long term disability
    • Buy with after-tax dollars so the benefits will be tax free
    • Your target amount should be 70% of your gross pay
    • Longer elimination periods bring down premiums
    • The elimination period is the time between being declared disabled and payments beginning

Long-Term Care

    • This is for nursing home, in-home, and assisted living facilities
    • This should be purchased as soon as you are 60 years old

Identity Theft Protection

    • Get identity theft protection that includes restoration services
    • Check into a rider on your home owner's or renter's insurance

Life

    • It is intended to replace lost income due to death
    • Buy term and pick a term that will take you until you are self-insured
    • Face value of the policy should be 10 times your income
    • If you buy a policy for your children, you only need enough to cover burial expenses
    • Most times it can be a rider on your life insurance policy for a few dollars a month
    • If you switch life insurance policies, make sure the new one is in effect prior to cancelling the old one!

Finally, once you start building wealth, an umbrella liability policy would be a wise decision.

Contact a Endorsed Local Provider today to update, change, or add any insurance policies!


To download a pdf of this, click below.


Insurance.pdf