Many of you know that there are two overarching principles in building your wealth. The first is investment and growth and the second is protection of your assets. Insurance comes into play to achieve protection. Because of its importance, an annual insurance review is highly advisable. Things change in life like marriage, divorce, a new child, home purchase or career shift and they can significantly impact your insurance needs. Other reasons to review your insurance include looking for better coverage and determining whether bundling or switching companies offers worthwhile savings. This month we’ll take a look at the more common insurance policies and some considerations when reviewing them.
Auto Insurance
- Have you added/removed vehicles or drivers?
- Are your coverage limits still appropriate?
- Are you eligible for new discounts (e.g., safe driving, low mileage)?
Homeowners or Renters Insurance
- Have you renovated or made major purchases that affect coverage needs?
- Is your coverage keeping pace with rising rebuilding costs or inflation?
- Do you have an up-to-date home inventory?
Health Insurance
- Are you on the right plan (especially if using ACA marketplace or employer coverage)?
- Has your health changed significantly?
- Are you maximizing HSAs or FSAs?
Life Insurance
- Do you need to adjust your death benefit (e.g., new mortgage, children or increased debt obligations)?
- Is your beneficiary information up to date and is it consistent with your estate documents?
- Should you convert a term policy or supplement it with another type of insurance?
Disability Insurance
- Do you have enough income protection if you can’t work?
- Is your policy short-term, long-term or both?
Long-Term Care Insurance
- Are you nearing the age when LTC premiums rise dramatically? (This typically occurs around age 60.)
- Should you consider hybrid life/LTC policies?
Umbrella Insurance
- Do you need additional liability protection (especially if you have significant assets)?
- Are your base auto/home liability limits sufficient to qualify for umbrella insurance?
Business Insurance (if applicable)
- Has your revenue, employee count or service offerings changed?
- Do you need cyber liability or professional liability now?
In addition to checking your coverage, it’s wise to compare rates regularly (many advise doing this every 2-4 years) to make sure you’re getting the best value for the protection you need. Insurance rates vary from company to company because each insurer has its own method for calculating risk and pricing, based on a wide range of internal factors. These factors include their proprietary risk-assessment algorithms, claims experience, corporate overhead, marketing objectives and discount strategy (bundling, safe driving, low mileage, etc.). Even with the same coverage, prices vary because insurers view and price your risk differently—and they all have unique business goals and data to back their pricing.
Whew, that’s a lot of things to review! One good way to start, especially if one agent/broker supplies a number of your policies, is to meet with that that agent. In a short meeting, they can advise you on any changes you might want to consider. Additionally, we’re available to help you take a holistic view of all your insurance needs and coverage in a no-charge, no-obligation initial meeting. Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.
This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products. Please consult your tax or investment advisor for specific advice.