“These days, you can buy insurance from anybody, even Snoopy. You can go online and download a form and get some kind of coverage in place. But you really want to make sure you have a big-picture plan that’s tailored for your family.”
- STEP #1: Sit down and talk with a professional who has your best interest in mind. When the unexpected happens, you want to know there is somebody who will walk you through the process. If there is a change in the family – a divorce, a birth, a marriage – you want to know who to call to make sure the necessary documents are updated. If there is a new tax law, you want to make sure your plan changes accordingly.
“When it comes to insurance, there are four basic needs that every family has: Auto, Home, Life coverage for both spouses, and a basic Umbrella coverage to wrap it all together.”
- STEP #2: Make sure the beneficiary forms are current. This includes spouses from current and previous marriages, as well as children of current and previous marriages.
I had a client tell me a story about a guy who had been married to his beloved wife for 25 years. When he died, there was $385,000 in death benefits. That money was passed on to his ex-wife, and not the dearly beloved current wife, and there was nothing that could be done about it. (And no, wife #1 did not share with wife #2.) Life gets busy. Don’t overlook little details like this that can lead to some very big mistakes.
- STEP #3 Update your policies so they reflect the current situation. You want to revisit your policy every 3 – 5 years to make sure that your coverage reflects your current needs.
I recently had a client come to me who was entitled to receive a death benefit from her husband of forty-five years. Only it had been decades since they had re-visited their coverage amounts. The year before her husband died, the policy had been reduced to ½. This is a common occurrence, because when you are newly married and in your twenties, it makes sense to expect that you will have the mortgage paid off by the time you are sixty-five. But things change, and life happens. Make sure your policies will work with what you have going on today.
- STEP #4: Look for areas where you might be exposed. This is something your insurance professional can do for you as part of their job. You want someone who can point you to the bigger picture. What might save you a few dollars a month today could cost you everything tomorrow. Says Jon:
“I recently helped a successful woman with her family’s policy review. She had done very well with her career and was able to afford both an apartment and a vacation home. But I noticed she was carrying state minimums on all her vehicles. This was one area where she was exposed. What would happen if she got into a bad car accident and was found to be at fault? She would stand to lose all her assets, wiping everything out.”
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