Protect yourself by having enough of the right kinds of insurance.Like what you hear? Help us out by writing a review at iTunes. Questions go to money@qdnow.com. Thank you!
Money Girl
158 MG How Much Insurance Do You Need?
Hey, Fidelity. How can I remember to invest every month? With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs. Oh, that sounds easier than I thought. You got this. Yeah, I do. Now, where did I put my keys? You will find them. Where you left them. Investing involves risk, including risk of loss. Fidelity brokerage services LLC member NYSE SIPC. If the new chicken big Mac at McDonald's looks like a big Mac, has sweet buns and sauce like a big Mac, but has two chicken patties, then it's not not a big Mac. I participate in McDonald's for a limited time. Hi, friends. This is Laura Adams, and you're listening to the Money Girl podcast. This is the fourth episode in our five-part series about taking charge of your finances. Today's post is about insurance, which types to have, and how much coverage is necessary to keep you protected. Without adequate insurance, everything that we've talked about in the prior three posts, setting goals, saving, and investing could all be destroyed. I really hate to sound like a doomsday-er, but a catastrophic event like a health problem, a car accident, or a death in your family could wipe out everything you've worked so hard to earn. It's not pleasant to think about what bad things could happen, and maybe that's why so many people are underinsured. But managing different types of risk is easy in a financial sense, because most of them can be passed on to a third party like a health or life insurance company. Having enough of the right kinds of insurance allows you to protect yourself and those you love from something unexpected jeopardizing your financial security and happiness. There are endless types of insurance from policies that protect airplanes to those that cover websites, but I'm going to focus on the five types that are most important for individuals and families. Type number one, health insurance. Health insurance is the most important insurance to have. Without it, you risk being stuck with a large bill if you have any kind of medical issue from the flu to a broken bone. Even a quick emergency room visit or a basic hospital bill can cost thousands of dollars. Starting in 2014, the Affordable Care Act, also known as Obamacare, requires just about every American to have health insurance or pay a penalty. If you can't get affordable coverage at work or if you're self-employed or unemployed, you can purchase a policy through your state's health insurance marketplace. Depending on your income and family size, you may be eligible for government assistance that will reduce the cost. Also note that health care reform prohibits insurers from denying you coverage or raising rates if you have a pre-existing medical condition. Visit insurancequotes.com and use the Obamacare eligibility calculator. It shows your eligibility for all subsidized health insurance benefits, including Obamacare, Medicaid, Medicare, and the Children's Health Insurance Program, known as CHIP. Type number two, disability insurance. Disability insurance provides a percentage of replacement income if you're unable to work due to a disability, illness, or accident. Remember that health insurance only addresses your medical bills. It doesn't pay your living expenses like housing or food if you can't earn money for an extended period of time. Statistics show that you're more likely to suffer a disability than you are to die before the age of 65. And when a long-term disability occurs, the average absence from work is two and a half years. That could cause a major financial strain for you or your family members who depend on your income. Social security is only available after you've been out of work for a year and are completely disabled. Workers' compensation insurance is only for work-related injuries. If you don't have the option to purchase a disability policy at work, or if you do, but it's not sufficient, purchase a private policy for yourself and have enough emergency money set aside to tide you over until coverage begins. Type number three, life insurance. Life insurance is critical when your death would create a financial hardship for those you leave behind, such as a spouse or children. If you're single or no one depends on your income, you either need a very small policy for your funeral expenses or none at all. If you have a stay-at-home spouse who cares for your children, you probably also need a small policy on his or her life to cover future child care costs. There are two main types of life insurance, term and permanent. Perm life insurance provides a benefit upon the death of the policy owner for a set period of time, such as 10 or 20 years. I prefer term insurance to permanent because it's inexpensive and gives you the most benefit for the dollar. On the other hand, permanent life insurance includes a variety of products, such as whole life, universal life, and variable life. I won't get into the details on each of those, but they provide a death benefit and an investment, all wrapped up in one. They're called permanent life policies because you get coverage for your entire life. A basic rule of thumb is to purchase a policy that's at least 10 times your income. So if you make $50,000 a year, you might need a policy that would pay your beneficiary $500,000. But factors like the number of children you have, education expenses, mortgage payments, and the lifetime income needs of a surviving partner or spouse should come into play. If you don't have life insurance through work, or if you do, but it isn't enough, visit Bankrate.com and use their "How much insurance do I need calculator?" Type number four, auto insurance. Auto insurance is required by most states. It's a collection of policies that protect you against financial loss in three major ways. The first is property coverage. There's a collision portion that covers damage that was the result of an accident. There's a comprehensive portion that pays for damage that was not the result of an accident, maybe from vandalism, storm damage, or theft. The second coverage is for liability. This pays for your legal obligations to others for damaging their property or harming them in an accident. And the third is medical coverage. This pays for the cost of treating accident injuries and sometimes for lost wages and funeral expenses. Every driver should have liability coverage. However, you may not need comprehensive or collision depending on the age and condition of your vehicle. For an older car, it may not be worth it. You should have enough auto insurance liability to cover the total value of all your assets, such as your home, vehicles, saving accounts, and investments if you were involved in a lawsuit. Rates for auto insurance vary depending on several factors, like your driving record, your vehicle, and credit. Choosing a higher deductible will lower your monthly premium. You can shop auto insurance at sites like carinsurancequotes.com and insureme.com. For prescription only, safety and pro found at freestyle lebrae.us. Now that we're in Q4, it's a good time to start thinking about making memories with the people you love most before the end of the year. We put a lot into the time we spend with our loved ones. So you want to extend that care, comfort, and peace of mind to what happens when you're gone. 41% of people don't have the life insurance coverage they need. Policy genius makes finding and buying life insurance embryos. With policy genius, you can find life insurance policies at start at just $292 a year for a million dollars of coverage. And some options are 100% online and let you avoid unnecessary medical exams. Policy genius combines digital tools with the experience of real licensed agents. You can compare quotes from America's top insurers side by side for free with no hidden fees. They have an amazing licensed support team that helps you get what you need fast so you can get on with your life. They answer questions, handle paperwork, and advocate for you throughout the process. Policy genius is the country's leading online insurance marketplace. And even if you already have life insurance through work, remember it may not protect all your family's needs or follow you if you leave your job. So save money and time on providing a financial safety net for your family. Head to policygenius.com or click the link in the description to get your free life insurance quotes and see how much you can save. That's policygenius.com. I love learning and anything that makes learning easier. If you're a parent and your child needs some homework help, then I XL is a right for your family. I XL is an online learning program for kids covering math, language arts, science, and social studies. I XL has interactive practice problems for topics from pre-K to 12th grade and everything is organized by grade and subject. As kids practice, they get positive feedback, awards, and explanations for wrong answers. I XL figures out what your kids need more help with and recommends more topics to practice. Their videos, lessons, sample problems, and learning games too. One subscription to I XL gets you all subjects and all grade levels. Membership started just $9.95 a month. It's no wonder I XL is used in 95 of the top 100 school districts. I think the positive feedback that I XL gives is really crucial when it comes to learning. So make an impact on your child's learning, get I XL now, and money girl listeners can get an exclusive 20% off I XL membership when they sign up today at ixl.com/moneygirl. Visit ixl.com/moneygirl to get the most effective learning program out there at the best price. Type number five, home insurance. Home insurance protects the replacement value of your home and your personal belongings. It's a requirement when you have a mortgage. Basic home insurance pays for claims when a natural disaster, such as a fire, tornado, or hail storm damages your property. Your possessions, like furnishings, clothes, and jewelry, are generally covered up to certain limits. There's also a liability portion of home insurance that covers you if someone gets hurt while they're on your property. And renters also need coverage. You can get renters insurance to cover your belongings in the event of a natural disaster or theft, for instance. You can compare rates for home or renters policies at sites like insurancequotes.com or innsweb.com. You work hard to build wealth and have a comfortable life. So remember to protect it by reviewing your insurance needs each year. To read a transcript of this show, visit the Money Girl page at quickandertietips.com. Just look for episode number 158 called What Kind of Insurance Do You Need? While you're on the site, you can connect with me on social media or subscribe to the podcast in iTunes, which is how most people get the show. Subscribing is always free and make sure that you'll get each new weekly episode as soon as it's published on the web. You can send me your money question through social media or email it to money at quickandertietips.com. I'm glad you're listening. To change. That's all for now. Courtesy of Money Girl, your guide to our richer life. Is it time to reimagine your future? The right business skills may make a difference in your career. 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