The Ultimate Insurance Checklist for Powerful Ladies
By: Kara Duffy
THE ULTIMATE INSURANCE CHECKLIST FOR POWERFUL LADIES
Disclaimer: This site does not provide insurance advice. This site is for information purposes only. This article is a resource for information based upon the author’s research and personal experience. Always seek a certified insurance agent to give you the best insurance protection needed for you and your lifestyle.
What is insurance?
The purpose of insurance is to protect your assets. An insurance company agrees to guarantee compensation for specific likely outcome or potential negative impact - loss, death, illness, damage, in return for your insurance premium or payments.
Insurance You Should Definitely Have
Health Insurance - Health Insurance protects you from high potential medical costs from an unexpected illness or accident. Additionally it helps to lower or eliminate routine health care. With medical bills being the number one cause of bankruptcy in the United States, don’t skip this one.
Home Owners & Renter’s Insurance - This protects your property. If you own the home, the structure is included. If you rent, it’s just the property inside. Sometimes vehicles and property in vehicles is also covered.
Auto Insurance - This is usually required to be legally driving and it’s smart. Select the highest for Liability for Bodily Injury (medical bills of other people you could be responsible for and sued for) and select the highest your comfortable with over $50K for Liability for Property Damage (car repair or replace costs for the other cars involved that you could be responsible for and sued for). For Collision, costs fix/replace your car in an accident, and Comprehensive random fix/replace needs to your car not related to an accident, choose the deductible that make sense based upon the value of your vehicle and the amount in your savings account.
Term Life Insurance - Repeat: TERM Life Insurance. There are many types of Life Insurance but the only one I recommend is Term Life Insurance. Life insurance allows you to provide for beneficiaries you leave behind after your death. You can pick anyone to be your beneficiaries. Your life insurance coverage should account for all the costs that will fall onto your estate: funeral costs, burial costs, costs to cover debts you have from credit cards to medical bills to outstanding mortgages PLUS the money for your dependents to live on for as long as you determine is needed. The ‘term’ part means that it’s coverage up to a set age. If you live past the age set in your term - great! Your premiums are returned to you, which you can then put into an investment account to be used exactly as the Term Insurance would have been. Or, you can roll over into a new Term Life Policy.
Insurance You Should Maybe Have
Dental Insurance & Eye-care Insurance - DEPENDS - sometimes these are both covered in your basic medical insurance policy. If they’re not, consider how often you seek Dental or Eye care. Do you wear glasses or contacts? Do you have a family history of eye conditions? Get the eye insurance. Do you end up with lots of cavities or dental work? Get the dental insurance. If you go for 1x year or even 2x year check ups for eye or dental care, calculate the out of pocket costs for those routine exams and cleaning (cost A). Compare annual insurance costs plus out of pocket expenses even with insurance (cost B). If cost B is less than cost A, get the insurance. If not, calculate how likely it is that you’ll need major eye or dental coverage and choose.
Earthquake, Flood, Hurricane and other Natural Disaster Insurance - these are supplemental insurance coverages for damages to your home and property as a result of said natural disaster. Most home owners and rental insurance does not cover damage and loss from Earthquake, Flood, or Hurricanes. Is your state or neighborhood prone to these natural disasters, then 100% get a supplemental policy. A California Earthquake policy, for example, is about $80/year.
Long Term Care Insurance - CONSIDER FOR YOUR PARENTS - This covers long term care needs not covered by heath insurance or Medicare for people at any age. Examples include home care, assisted living, adult daycare, hospice, and nursing homes. This is especially useful for people with Alzheimers or Parkinson’s disease. This is something to consider taking out on your parents if you’re not sure how you’d support them financial if they needed such services. It’s also recommended to take out this insurance prior to need as it may not be available once a diagnosis has been determined.
Travel Insurance - The coverage varies for travel insurance based upon the plan. Reasons I would personally purchase travel insurance are 1) traveling during risky weather (hello Hurricane season), 2) travel that you may have to change, adjust or cancel, 3) you have an illness or condition that could impact your travel plans, 4) it’s a big or expensive trip. Always read the details to see if it’s worth it. Always check the airlines cancelation and change policies to see if they overlap. Also, some credit cards come with travel insurance protection. Know if you have this so you don’t double up unnecessarily.
Title Insurance - this protects you in the event a property you buy (home and/or land) may not be clean from deed fraud, deed errors, public record fraud, public record mistakes, disputed property lines, tax liens, zoning changes, etc. Buying an old home? 100% yes. New to brand new homes? Consult with your closing attorneys and lender.
Mortgage Insurance or PMI - required if you’re putting less than 20% down on a home purchase as it compensates lenders if you default on your mortgage. When you’ve paid up to 78% of your home’s value your PMI is required to be cancelled by law. Make sure you follow up with your lender about this and you can also negotiate removing your PMI earlier.
Choose Life Insurance + a Savings Account Over These Insurance Types:
For the following list of insurance options, your money in the short term (paying the monthly or annual policy) and long term will go farther if you put it into savings or invest it. In the event you should encounter one of these unfortunate or unavoidable events, you can then pull from your savings or other assets without any stings attached or limitations as you might have with coverage from the below policies.
Disability Insurance - provides income in the event you can’t work or perform at your job due to a short term disability usually 3-6 months. Sometimes this is provided by your employer. Long Term Disability Insurance provides coverage for disabilities longer than 6 months.
Accidental Death - this insurance gives your beneficiaries money if you have an accidental death. Thought: 1) Get Life Insurance and 2) let’s spend your time and money building up a savings account and investments for beneficiaries instead.
Cancer & Hospital Indemnity Insurance - this is insurance to cover costs not covered by your regular medical insurance for long term hospital stays and potential high costs of cancer treatments.
Credit Life & Disability - these two type of insurance pay off loans you have in the event you die before it’s paid (Credit Life) or make loan payments if you’re disabled/unable to work (Credit Disability). Thought: 1) Get Life Insurance and 2) let’s spend your time and money building up a savings account and investments for beneficiaries instead.
Pre-Paid Burial Policy - you pay into this policy and then when you die, your beneficiaries get cash to pay for your funeral and burial costs. Thought: 1) Get Life Insurance and 2) let’s spend your time and money building up a savings account and investments for beneficiaries instead.
Mortgage Life Insurance - this pays your outstanding mortgage in the event of your death. Thought: 1) Get Life Insurance and 2) let’s spend your time and money building up a savings account and investments for beneficiaries instead.
Critical Illness Insurance - if you’re diagnosed with a specific illness on a predetermined list by the insurance carrier, you may qualify for a lump sum payment. Typical predetermined lists are unfortunately common illnesses such as stroke, heart attack, and cancer. Thought: this sounds like scare tactic marketing. The expensive, hard to diagnose and treat illnesses aren’t on this list.
Pet Insurance - Pet insurance covers some accident, illness and routine care for your pets. The premiums on most plans go up as your pet’s age increases. Instead of insurance, I recommend having a Sinking Fund for pet costs - basically a savings account you build up over time to cover all costs associated with your pet. If the average premiums of pet insurance is $50-$150/month depending upon pet age, I’d recommend putting $100/month for the lifetime of your pet into the fund. Reimburse yourself as you have pet bills from that savings account.
Identity Theft Insurance - this insurance reimburses you for the costs to repair your credit report and clean up the mess associated with your name due to identity fraud. Only get this if it covers having a case worker do all the work for you. Average out of pocket costs to victims in 2018 was an average of $48, which should be no problem to cover, so it’s more about your time to jump through all the hoops to fix it.
COMING SOON: GUIDE TO BUSINESS INSURANCE!
What did we miss an insurance type that matters to you? How has this article impacted you? Tell us below in the comment section.