Thursday, June 08, 2006

annual insurance coverage review & 12 valuable insurance tips

My Personal Finance Blog has an excellent discussion of his annual insurance review.

I highly recommend checking it out.

The most important things I know about insurance are:

  1. Make sure your deductions are set appropriately high to an affordable level - for most people that's $1000.
  2. Make sure your coverage is current and upto date.
  3. Make sure you have term life insurance that will last a reasonable amount of time - I prefer 30 years if affordable, but then again I'm in my 30s and expect my investments to be more than able to absorb any ongoing expenses my survivors should have if I pass in my 60s.
  4. See if you can obtain multi-policy discounts of reasonable size if you bring different insurance types to the same carrier - the most common are package home owners and auto.
  5. Be certain to have umbrella liability insurance. $1m is very reasonable.
  6. Think carefully and determine if you have or need water backup coverage.
  7. The same for flood insurance.
  8. If you are under 60 and not already independently wealthy, make sure you have disability insurance.
  9. If you're 50 or over, think about LTC - long term care insurance.
  10. If you travel internationally for business, does your employer provide you with K and R insurance - Kidnap and Recovery. You may have to go to London (Lloyd's for it). Read the news - it's a nice thing to have.
  11. Unless you're over 60, convert your whole life and variable life policies to term insurance. There are very few legitimate reasons to keep this overpriced inefficient products - most of them are related to estate planning. Otherwise, you can do much better with term.
  12. Make sure you're broker is comparing insurance products from multiple companies - if not, fire him.

Have a wonderful day,


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