Last night in FPU we learned about insurance. We learned what kind of insurance you need, what kind is a gimmick, and the best way to do insurance. We also were very humbled by stories that have happened to people before they got insured properly and after. It really puts things into perspective. It definitely made you want to run home and check your coverage to make sure it is adequate.
Here are a few key points from the lesson:
If you have a full emergency fund (baby step #3), raise your deductible.
Make sure that you carry adequate liability.
Homeowner’s should be guaranteed replacement cost if at all possible.
If you rent, you NEED renter’s insurance.
See if an HSA is the way for you to go.
Increase your deductible, but never decrease the maximum pay.
Life Insurance aka Death Insurance
Replaces lost income due to death.
Try to get Term insurance and invest the rest of what it would cost for a cash value policy.
Designed to replace your income lost due to short-term or permanent disability.
Try to get own occ or occupational disability, therefore, if you are not able to do the job you were trained to do you are covered.
Always purchase with after-tax money, that way your benefits will be tax-free.
Long-Term Care Insurance
Only need if you are 60 or older.
Identity Theft Protection
Make sure that your coverage includes restoration services that assign a counselor
Need more than just credit monitoring.
- Accidental Death
- Cancer Insurance
- Credit life and disability (on debt)
- Pre-paid burial policies
- Mortgage life insurance
- Policies with fancy options (return of premium, waiver of premium)
I can tell you, I had no idea about insurance before this. I knew it was a necessary evil in your life for things like auto accidents and crazy weather. But I didn’t know the value of insurance until this lesson. I will be looking into my policies and options as soon as I can. It’s definitely not something to put off. You never know when life will strike you down. I know I have health insurance, auto insurance, homeowner’s insurance, and life insurance. Other than that I’m not sure what I have. I also need to look into those policies to make sure that I have adequate coverage on all of them.
Have you been wondering about Financial Peace University? Visit www.daveramsey.com/fpu to find a class near you or register online.
All the opinions are mine, I am sharing my story. This should not be taken as advice on your situation. YOu should always consult with a licensed professional before making any changes to your policies.