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3 Things 12-4-23

Thing One


Five Types Of Insurance Everyone Should Consider



1. Long-Term Disability Insurance


According to the Social Security Administration, one in four of today's twenty-year-olds will become disabled for 90 days or more before they turn 67.  LTDI replaces up to 70% of the income lost due to the inability to work.


Whose should get LTDI?  Anybody who doesn't have another source of income to replace the income lost to disability.


2. Life Insurance


Life insurance is for the people you leave behind.  It can either serve as a replacement for the financial support that you provided while living or a financial boost if your survivors weren't dependents.


Who should get life insurance?  Anybody with dependents who would be financially vulnerable if they died or anybody who wants to leave more money than they were able to amass through saving and/or investing.


3. Health Insurance


Healthcare costs are high, and for many, they are a major financial burden/expense.  But they're even more so without health insurance.


Who should get health insurance?  Everybody.


4. Homeowner's Insurance


Occasionally, water heaters flood floors, trees fall on roofs, fires burn all or parts of homes, and visitors slip and fall.  A homeowner's insurance policy takes care of the associated financial consequences and lets the individuals focus on the physical and emotional.


Renter's insurance is a subset of this type of insurance.


Who should get homeowner's insurance?  Everybody who owns a home.


Who should get renter's insurance?  Any renter who wants to make sure his personal property and potential physical displacement would be covered events like a fire or flood.


5. Automobile Insurance


All states require some level of coverage.  Still, many people don't get any or get only the state minimum requirements. This puts them at financial risk if they are in an accident.


Who should get auto insurance?  Everybody who owns a car. (Get enough coverage and shop it often!)


Thing Two


Life Insurance Is back On The Radar


It’s not something any of us like to think about, but none of us will live forever.  As such and considering that many of us will not have saved enough to look after our loved ones should we pass away prematurely, life insurance has a critical role to play in our financial planning.  The older we get, the more we think about that idea but lately, even the younger crowd is thinking about mortality.  To that end, the following is an excerpt on the topic from the Wall Street Journal:


“…More younger adults have been looking for life insurance since the pandemic began. Applications for life insurance policies jumped 3.9% year-over-year in 2020 in the U.S., according to MIB Group’s Life Index—the biggest annual increase in records going back to 2012. Applications were up nearly 8% in 2020 among people under age 45. In 2021, applications rose 3.4%, with the most growth coming from those ages 31 to 50.


One source of the increased interest in life insurance was people whose jobs exposed them to Covid-19 before vaccines became available—service workers, first responders, teachers, healthcare workers… But the effects of the pandemic made many people of all kinds consider their mortality and re-evaluate their finances…”


The young author of the piece from which the excerpt above was taken also offered a personal take on the topic:


“…For Ryan and me, one of the driving forces behind our decision to get life insurance was the death of my father-in-law at the end of 2020. As our family grappled with the sudden loss and the many loose ends Ryan and his brother were left to tie up in the wake of such a loss, I was a witness to the pile of costs that were left to the survivors: attorney’s fees, remaining bills, cremation costs. His father had some life insurance that eased the burden on the two sons.


The pandemic—especially before vaccines were available—made everything feel uncertain for us. We isolated ourselves entirely and took every precaution to avoid possible infection, but we worried that at any moment one of us could fall ill and leave the other in the lurch. Our youth gave us little comfort as we watched the death toll rise.


I thought of what Ryan would be left to cover in the event of my death. He would be responsible for the entirety of our Brooklyn rent, which neither of us could afford alone, and we were looking at buying an apartment in Manhattan, which would be just as costly. Ryan would lose my health insurance coverage, and the costs of his chronic health condition would soar as they had before we were married. I thought, too, of my younger brother, who was nearing the end of high school. I had hoped that once he started college I could help him pay for textbooks or other incidentals. I imagined what it would be like if I wasn’t around.

Ryan did similar calculations, had similar thoughts, and we came to the same conclusion: Whatever we could do to be prepared, we would do…”


 Again, nobody likes to think about life insurance, but almost everybody should.  And the younger you are the better as age and health are the key determinants in pricing. As with most of the topics discussed in this newsletter, we can help.   


Thing Three


Just A Thought


“Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”― H. Jackson Brown Jr.


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