Goal: Determine if coverage still meets your needs. Prepare for open enrollment
Insurance is often overlooked in its role as the base of a sound financial plan. Insurance premiums can be a household’s largest expense when all of the premiums are grouped together. Insurance is a way to protect yourself against a specific risk. If you are faced with a devastating loss of life, health, income, home, or auto, having the right insurance in place can make a huge difference.
How do I review my insurance?
Educate yourself on the type of coverage that you are considering. Insurance products will differ in terms of what’s covered, definitions and how claims are paid. Premiums are impacted by the level of risk and by components such as deductibles, co-pays and waiting/elimination periods. Each insurance company assesses risk differently, so something that’s an issue with one company may not be an issue with another company.
Review all of your insurance policies and compare your coverage to what your risks are. You’ll want to take into account these factors:
- Do you have a risk that is not covered? For example, earthquakes and floods are not covered by most homeowners insurance policies and require separate policies.
- Do you have coverage that is no longer needed?
- Have you asked about discounts? Insurance companies can offer many different discounts depending on the type of insurance.
- The financial strength of an insurance company is important because an insurance policy is a long-term commitment. Learn more here.
Be prepared for your employer’s open enrollment by making sure coverage still meets your needs and preparing to adjust accordingly. Consider whether you can make changes that will lower your premiums such as applying for a discount, replacing coverage or covering uninsured risks such as flood or earthquake insurance.
Download Insurance Worksheets (access the Get Ready Financial Preparedness Club resource center and download fillable insurance worksheets -(here).
The Get Ready Toolkit also includes a subscription to the Get Ready Newsletter which follows the Get Ready Financial Calendar to help you stay financially prepared.
Pick up a copy of Get Ready: A Step-By-Step Planner for Maintaining Your Financial First Aid kit to guide you through organizing your financial documents and creating your cash flow statement and net worth statement. Pick up a copy on Amazon (here), purchase a digital copy (here) or learn more (here).
- Annual percentage rate for insurance premiums (calculator)
- Find your optimal insurance deductible (calculator)
- Insurance company rating services
- Insurance Annual review guides (coming soon)
- Ten things you need to know about disability insurance
- Why would my life insurance policy underperform
Here's my pick of the top ten questions from Questions and Answers on Life Insurance. Click on the question to view the answer: