Insurance and You

Did you know that 1 out of 4 Americans are uninsured and the ones that are, 60% are underinsured?

With the overwhelming and necessary conversations of the politics of health insurance, I am speaking of just our basic day-to-day insurance requirements; automobile, property and life insurance.  At our last meeting, we really dove into the odds and ins of “full-coverage”; and basically decided that there is no such thing.  Everyone’s insurance requirements are based on their individual need for protection.

Since life insurance provides a wealth building benefit, I will devote most of my time to that and encourage you to have an annual check up to determine if you are underinsured in other areas.

Let’s look at John and Sarah. 

John is married with two (2) children and a wife to think about.  Upon John’s untimely death he had an unsecured credit line of $200,000, a balance on his home of $100,000 plus about $50,000 in other debt.  At minimum, during this time in his life, he should have $350,000 just to rest at night knowing that his wife and children won’t have to assume his debts and pay to bury him! Now taking into consideration his annual salary of $50,000, he should have 5-10 times that in life insurance.  He may get some benefit through his company, however if it is two (2) times, then he should make up the rest.  With this information, going on the lighter side, he needs $150,000 because his family will no longer have the benefit of his income.  With this scenario, John’s family is able to pay off all of his obligations and have about $130,000 or so after burial expenses.

Sarah, on the other hand, is a self-employed single female with no real obligations.  Her business is valuated at $300,000; she is 30 and insures herself for $1,000,000.  Ten (10) years later, she is married and has a child.  She and her husband began to assess their needs as a family, however, Sarah is deemed uninsurable due to a medical condition.  When she purchased her insurance policy years ago, she bought $500,000 term and $500,000 permanent.  She will always have the $500,000 for her family.

Not only do jobs, martial status, family growth change, medical conditions change as well.  Insure your life now!