Insurance Review: Protecting Your Financial Future
Insurance is Not an Investment
Why Review Your Insurance Policies?
- Life Changes: Major life events (marriage, children, new home, new job) can significantly alter your insurance needs.
- Cost Savings: Premiums can change, and new providers might offer better rates for the same coverage.
- Adequate Coverage: Ensure you’re not under-insured (leaving you vulnerable) or over-insured (paying for more than you need).
- Understanding Policies: Many people don’t fully understand what their policies cover or exclude until it’s too late.
Key Types of Insurance to Review
| Type of Insurance | What it Covers | Key Considerations |
|---|---|---|
| Health Insurance | Medical expenses, hospital stays, prescription drugs. | Deductibles, co-pays, out-of-pocket maximums, network (HMO/PPO/HDHP). |
| Life Insurance | Provides a payout to beneficiaries upon your death. | Term vs. Whole Life, coverage amount (10-12x income), beneficiaries. |
| Disability Insurance | Replaces a portion of your income if you become unable to work due to illness or injury. | Short-term vs. Long-term, benefit period, waiting period, percentage of income replaced. |
| Auto Insurance | Covers damage to your vehicle, other vehicles, and medical expenses in an accident. | Liability limits, collision, comprehensive, uninsured motorist, deductibles. |
| Homeowners/Renters Insurance | Protects your home/belongings from damage, theft, and liability claims. | Coverage limits, deductibles, personal property coverage, flood/earthquake riders. |
| Umbrella Policy | Provides additional liability coverage beyond your home and auto policies. | Extra layer of protection for high-net-worth individuals or those with significant assets. |
How to Conduct an Annual Insurance Review
- Gather All Policies: Collect all your current insurance documents.
- Assess Life Changes: Have you married, had children, bought a house, changed jobs, or started a business? These impact your needs.
- Review Coverage Amounts: Is your life insurance still adequate? Are your liability limits high enough?
- Check Deductibles: Can you afford a higher deductible to lower premiums, or do you need a lower one?
- Compare Quotes: Get quotes from 2-3 different providers or use an independent insurance agent who can shop around for you.
- Understand Exclusions: Know what your policy doesn’t cover.
Don't Under-Insure, Don't Over-Insure