New Year, New Insurance?
Why 2021 is an especially important time to re-evaluate your insurance coverage.
“These uncertain times” sounds like an understatement these days. With the global pandemic and shaky economic realities facing so many American workers, there is a lot of downright fear about the future, in particular when it comes to our financial stability.
One way we can protect ourselves from uncertainty is by having a solid insurance strategy. A good financial plan includes a customized look at the right insurance products for you, which might include health, long- and short-term disability, life, even pet or long term–care insurance, depending on your life situation and family.
And though it may feel like a waste of money when things are tight, the right insurance is essential to protect your wealth and your financial future.
Here, our planners share some of their right-now tips for thinking about insurance.
Stop assuming things might not happen to you. Disability, death, and incapacity aren’t pleasant things to ponder, but the pandemic has made us realize that
Review your insurance.
Whether you have it through work or are self-employed, you need to take a look at what you currently have, and how it fits your current reality. This might mean comparison shopping for broader coverage, or adding a product such as life insurance if you’ve recently married and/or had children. Make sure your policies include updated beneficiary information, too. Look for opportunities to maximize your savings and protection, like a health savings account.
If you have to choose where to spend, prioritize health insurance, then disability, then life insurance. Statistically, you are most likely to need health. If you’re self-employed then shop around; if you’re in a group plan, ask if there are better plans for your life, family.
Don’t forget disability.
About 1 in 3 Americans do not have adequate disability insurance, and yet statistically, we have a 30% chance of becoming temporarily disabled between the ages of 30 and 65. We’re becoming more aware of situations like “long covid,” where people are unable to recover and work.
Don’t assume your company-provided disability insurance is enough.
If you can only pick one, choose long term disability (your real short term policy is your emergency fund). If you have an option to sign up through work, take advantage of that—it’s generally way cheaper than a policy on your own. Check with your benefits department to find out what coverage is available, and consider supplemental coverage if necessary, as some work plans have a monthly maximum that is way too low.
Term life is where it’s at.
For pure protection in terms of loss of income, term life is, relatively speaking, an insanely good investment. This is the kind of coverage you’ll want during your child-rearing and mortgage-paying years, in case something happens to you. Our motto? When contemplating signing up, do it sooner and younger. It’s always cheapest today (or yesterday).
A financial planner can help you customize and prioritize your insurance portfolio no matter what your budget. Schedule a chat with an Aspen Wealth Strategies planner today to keep your wealth and future protected.