Once a year, you need to pull out your policies and do a checkup on your insurance. Remember that insurance is to protect against major events. Don’t try to protect against everything, because if you do, you’ll end up paying too much for insurance and not enough going into your savings and investment accounts.
Pull out those policies. List them all with the company, the policy number, the name on the policy, contact information. Because often when you need insurance, you need to grab it at a moment’s notice, or you have to tell someone to find it for you.
Keep it in a safe place. Is there a trusted friend or family member who can have that list? Or, is there a computer file that someone can get to very quickly or simply a paper file? And, all the phone lists need to be there so they can know who to contact whenever there’s a problem.
Look at each individual policy. With your homeowner’s policy, the thing you need to watch for are replacement costs. Earlier this year, we had a big event with a hail storm, and so we saw that in action.
Then, your life insurance policies—remember, life insurance is really to protect against lost income. So only insure those family members whose income is important to the family. You don’t need to insure children. But you can have changes in the family, so watch out for that.
Of course, health insurance is going through major changes right now. Go back and look at your preferred provider lists. Make sure those are updated.
With your auto insurance, compare the costs. It’s very competitive. You might find a better deal out there.
For those people who are getting a little older, you need to start looking at long term care insurance. Start looking when you hit 50. Many people don’t start looking at this possibility until they’re 70, and at that time it’s usually too costly. Get 2 to 3 quotes so you can compare companies. Try to keep all of the benefits similar, and I always encourage people to ask for an inflation rider. Once you do that, you need to think about what your premium is each month, and you also need to think about the safety and stability of the company. Will they be here 20 years from now when you need them?