< HENRYs

Insurance to Protect

Insurance is an important tool that can offer peace of mind over the financial security of you and your loved ones. If you are just beginning to build wealth, you now have something to lose. Be sure to consider different insurance policies depending on your situation.

Term Insurance

With term insurance, you receive coverage for a specified period of time, typically 10 to 20 years. Term insurance is the most affordable policy, as the premiums are low, and payments are only made during the specified term. The downside is that it does not accumulate a cash value, meaning that the premiums paid are not received back later.

This type of policy can best protect your family. For example, if you have a mortgage, a stay at home spouse, and lots of bills to pay, term insurance can help take care of these for your beneficiaries.

Whole Life Insurance

Going by the name, whole life insurance provides coverage for the entire lifetime, rather than a specific term. While more expensive premiums, the policy does accumulate a cash value, which the policy can be surrendered for, or borrowed against.

As you get older and want permanent life insurance, it may make more sense to get a whole life policy. This type of policy can help you worry less about your obligations in the event of your death.

Umbrella Insurance

Personal umbrella policies are made on top of a person’s existing liability insurance policies. This can provide excess protection of your property or assets in the event of a loss.  Think if you were at fault in an accident with a Bentley for of attorneys.  Most likely your car insurance would not cover the entire cost of this accident and you would be liable for the amount above and beyond your car insurance coverage.  One of the most important types of insurance to have as it will kick in once your other policies are exhausted.  Typically this will cover a fixed dollar amount over the lifetime of the policy.

Disability Insurance

Disability insurance provides income to the policy owner in the event that they become unable to work and earn income due to a disability. In essence, it replaces lost income. Generally, less costly policies may have a lower percentage of your current income they will replace if you become disabled, a more strict definition of "disability," and a shorter benefit period for how long you will receive payments. If you work with your hands, this is a crucial component to your financial security because your physical abilities are required for you to earn your paycheck.

Long Term Care Insurance

Nursing home care, in-home health care, and assisted living facilities may all be covered by a long term care insurance plan. While usually for those 65 and older, those with a chronic disability are also eligible. These services are very expensive, and can quickly deplete your savings if you pay out of pocket for this care, so it is very important to have a plan regarding your health care as your get older.  

Transferring Risk

Overall, you want insurance to allow you a cleared conscience. You don’t want to be overburdened with premium payments, but not having insurance is very risky, and can be dangerous if there is a loss. Finding the right amount of that risk to transfer to insurance companies will protect what you are building. As you begin earning more, and taking on more expenses, you might require more coverage. Insurance is an ongoing process that will require a reassessment of your needs every so often. Make sure to evaluate your insurance needs to determine what is the right amount for you.