Provided by Terry Garland and written by Indigo Marketing Agency, a non-affiliate of First Allied Securities, Inc.
It’s pretty laughable what you can get insurance for these days. If you read about “cold feet” insurance for when you or your betrothed has a change of heart, or alien abduction insurance, you’d likely laugh it off and go on with your life. Thankfully, most policies out there are legitimate and can provide much-needed protection for your assets and your loved ones.
Insurance is simply a contract that protects the insurer (you) or the insurer’s property from financial loss due to damage, liability, or injury, (1) and gives you some protection when the unexpected happens. It’s not a question of whether or not you need insurance, it’s a matter of whether you have the right kind of insurance.
Here are 4 essential insurance policies you may want to consider.
1. Life Insurance
Thankfully, this is the least commonly used insurance of the four, but the most regularly purchased due to its importance. Life insurance protects your dependents in the event of your death, so it’s crucial to carry life insurance if you have children or other dependents. Additionally, it’s wise to make a habit of updating your coverage based on your needs at least once per year.
As of 2018, only 59% of Americans carry life insurance and a third of those only have a basic group policy. (2) This is in opposition to the fact that 84% of Americans believe most people need life insurance. Life insurance policies should be purchased to take into account mortgages, non-mortgage debt, childcare, college savings, and more. Stay-at-home parents should also have coverage since they provide valuable work that would be costly to outsource in the event of their death. Business owners may have other insurance needs to protect the future of their business.
The next three insurance coverages are considered living benefits insurance. In other words, these policies serve as income replacement and health cost coverage tools to have in place in order to help ensure that you and your family can reach your financial goals with as little financial disruption as possible while you are living.
2. Long-Term Disability Insurance
The Social Security Administration estimates that the average 20-year-old worker has a 25% chance of becoming disabled and losing at least a year of work before normal retirement age, (3) but only one-third of Americans have disability insurance. (4) An accident, injury, or illness that keeps you from working can wreak havoc on your financial plans and set you back months or years. Common long-term disabilities can even include neck, back, or joint disorders.
While many people believe they are covered by their employer’s long-term disability insurance, the coverage may be limited and inadequate. Coverage of up to two years is the typical limit for employer benefit long-term disability plans. The need for a private long-term disability coverage will pick up where employers’ long-term benefits fall short. Before your employer long-term benefit is activated, most employers’ short-term benefits will provide coverage for three to six months. If you have a high-paying job, it’s especially crucial to purchase long-term disability insurance to protect against an unexpected loss of income.
3. Critical Illness Insurance
While no one wants to think about a life-changing illness entering their life, it happens more often than you might think. Critical illness insurance pays a lump-sum amount to help with the costs associated with the illness. This insurance is unique because there is flexibility with how you can allocate the funds. You can use it to replace income for you and your spouse while you are dealing with an illness, or it can provide for alternative medical treatments not covered by other health insurance. If you don’t want to worry about money while battling a serious illness, consider critical illness insurance.
4. Long-Term Care Insurance
If you are approaching age 65, it may be a gamble to go without long-term care insurance. According to the U.S. Department of Health and Human Services, an average 70% of people turning age 65 will require some form of long-term care during their lifetimes. (5) Additionally, 20% of 65-year-olds will need long-term care for more than five years.
Long-term care insurance covers the cost of services that include a variety of tasks you may need help with as you age. Today’s long-term care policies offer more flexibility and benefits than ever before. It is important to understand the long-term care insurance options available to you and whether or not a policy is appropriate for your lifestyle and needs. While some policies can be expensive, requiring long-term care without insurance in place can be financially devastating.
Get The Coverage You Need
Whatever insurance policies you need, don’t wait to get coverage. Since insurance can get complicated, someone experienced with insurance policies can offer you guidance on the products available to you and how they can integrate into your other financial strategies. To see how insurance can lower your risk and protect your assets, call us at Golden Capital Management today at (515) 226-0115 or email info@garlandandassoc.com.
About Terry
Terry Garland is the founder and CEO of Golden Capital Management with more than 25 years of industry experience. He works with individuals, small-to-medium-sized businesses, and medical professionals, including physicians and dentists, allowing them access to a wide variety of specialized services and investment vehicles to fit their specific needs. He graduated from Drake University and attended the Wharton School at the University of Pennsylvania and is a certified wealth strategist and a registered principal. With offices in Des Moines, Iowa, and Carlsbad, California, he serves clients across the country. Learn more by connecting with Terry on LinkedIn.
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(1) https://www.investopedia.com/terms/i/insurance.asp
(2) https://www.tbrins.com/uploads/9/5/9/7/95973204/2018-insurance-barometer-study.pdf
(3) https://www.ssa.gov/oact/NOTES/ran6/an2017-6.pdf
(5) https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html