Include Insurance as Part of Your Financial Plan

Proper insurance coverage is a critical building block to a solid financial plan. The number one cause of bankruptcy in the United States is an unforeseen expense not properly covered by adequate insurance when the need occurs.

Your current stage in life typically dictates the types and levels of insurance coverage that you need in place. Health insurance coverage is always a primary need, which can be provided through your employer or through individual options, and it can be structured to cover spouses and children as well. A plan tied to a Health Savings account is typically the most beneficial and cost-efficient manner to provide this coverage. Liability and replacement cost related to all real property that you own, such as a home and automobiles, is also of utmost importance. Don’t skimp on these coverages, and consider raising your deductibles to make the premiums more affordable within your budget. With this increase in deductibles, make sure your emergency fund can cover these potential out-of-pocket costs. For life and disability insurance, once you have someone depending on your income for their well-being for a specific period of time, such as a newborn, these coverages become critical immediately. A term life policy for a specific timeframe is typically sufficient. As you enter the stage in life where you have accumulated a certain amount of assets, an adequate “umbrella” liability policy should be added to supplement your overall coverage.

Although there may be times when a GoFundMe page is appropriate, it is best not to have this as your, or your family’s, only option when the need arises for life’s unforeseen occurrences.

by Mark S. Reagan – Financial Advisor