Most of the time when I talk to people, the biggest problem that I see is they have too much insurance. We have to balance protecting ourselves and not getting carried away and costing too much that it hurts our other finances. Once a year, pull out those policies and take a look at them. List the company, the policy number. Check the name on the policy and contact information, because you want to be able to get your hands on them when you need them. Keep them all in a safe place. Let a trusted family member or friend know where they are. Of course, you can also put them all in a computer file so someone can get them—or a paper file, or you can list them in your phone.
Review them annually. Start with that homeowners policy, and the big thing to watch there is to make sure that the policy is big enough to cover replacement of your home because we see increases in the value of that home.
Then with the life insurance policy, make sure there are people who are dependent on your income—that’s when you need to keep life insurance. Sometimes we have changes in our families, and we need to watch the beneficiaries on those policies and check those quite often. And at some point when you get older, you may build up enough in assets that you don’t need life insurance.
Now, of course, health insurance is very important. Keep those lists of preferred providers.
Disability insurance is also another important thing to look at. Many employers will offer disability coverage, so check with them to see if that’s available.
Then, of course, car insurance—compare those costs. It’s very competitive.
With long term care insurance, I always tell my folks to start looking at that when you’re around 50 years old or in the fifties. Get 2 to 3 quotes. These are governed by the state of Mississippi, so you want to keep all the benefits similar. Try to get them to put in an inflation rider. And, really, you’re just trying to compare on the premium cost as well as making sure these are solid companies who will be there in twenty years when you need them.
Insurance is a big expense for many people. Make sure you’re getting your money’s worth.
Concerning instances where people have too much insurance: often they will have health insurance and life insurance; I see cancer policies on top of that even though other insurance policies will cover that. Many times you have people who will still hang on to life insurance policies even though they’ve built up enough assets and their children are grown and don’t depend on them anymore. So, we go back and look at each of those policies and ask: Would our money be better well spent somewhere else (investing it, for instance)?