Money Rule #8 Make Sure You Are Protected
You can have the best 401(k), be tucking away significant sums of money, and be great at sticking to your budget, but if you aren’t protected, it only takes one serious medical event to place your financial stability at serious risk.
We all strive to be careful, but as my mother said, “it’s not necessarily what you are looking for that can hurt you, it’s the thing you don’t see”. Do you have the following insurances in place, either through your employer or owned individually?
Health Insurance Homeowner’s or Renter’s Insurance
Disability Insurance Umbrella Coverage
Life Insurance
We will take a deeper look into each one of these, but you can always contact us directly to find out how we can help you find affordable protection for your financial well-being.
Protecting Your Health
Health Insurance - We can’t stress enough how important it is to have health insurance coverage, even if you are under 30 and single. Any money you save by not purchasing health insurance can be quickly eroded by one significant health event. According to website CostHelper.com, typical costs without health insurance, for non-surgical treatment for a broken leg typically costs up to $2,500 or more for a fracture that requires a cast. A leg X-ray costs an average of $210, according to NewChoiceHealth.com , but can cost as much as $1,000 or more at some radiology centers.
Disability Insurance - protects your availability to bring money into the household in the event of a longer-term injury or illness. Did you know that disability is the leading cause of home foreclosures? Workplace-provided disability insurance only pays on an average about 60% of a worker’s pay, and you’ll be liable for income tax on any benefit paid out. But that is certainly better than $0. Individual disability polices can be affordably purchased and since you pay the premium, any benefits received under a policy are not taxed.
Life insurance - We often get the question “do I need life insurance”? or "how much life insurance do I need?" Every situation is unique, but in general, if you have someone who depends (or would later depend) on you for financial support, you need life insurance. It provides cash to pay outstanding debts, funeral expenses, and income or estate taxes.
People often think that the life insurance they are provided by their employer is sufficient. A $50,000 policy, or one or two times your salary, doesn’t go as far as you think it might. It sounds like a lot of money until you figure that it has to cover some or all the expenses for your loved ones in your absence. Plus, if you are separated from your job, typically the insurance won’t “move on” with you.
Coverage is probably cheaper than you think. There are many affordable policies available to protect your family. For example, you can find $500,000 in coverage for a 35 year old healthy, non-smoking male for about $1.00 a day. And the younger you are, the less expensive it is. It is never financially efficient to “wait until I can afford it”.
No-one wants to be invited to another “beef and beer” fundraising event for a hurting family that raises too little, too late. Call us today for help in finding affordable coverage for you and your loved ones.
Inspired by: “The Index Card: Why Personal Finance Doesn’t Have To Be Complicated” by Helaine Olen and Harold Pollack; Random House, 2016)