Iâ€™ve noticed that while people love to watch their investments hourly when it comes to insurance they buy it and forget about it. This is unfortunate, because your insurance needs tend to change more often than your investment needs. Even though I study and advise on insurance matters regularly, I still avail myself to the advice of experts in personal property and casualty, life, health, and business insurance matters. And I recommend you do as well.
That said, the key is toÂ use their services. They should be periodically checking over your circumstances, seeing if anything has changed in your life, your goals, or your finances. While some will do this proactively, you may want to take the initiative. Find a good agent who wonâ€™t turn these meetings into strict â€œsales jobs.â€ A good agent will look for the best coverage for your situation, regardless of the high or low premiums.
For you do-it-yourselfers (you know, where your insurance agent is a faceless entity on the other end of a website or 800-number), here are some things that may lead you to consider changes. This is nowhere near comprehensiveâ€¦itâ€™s just enough to get the juices flowing.
For example, your life insurance coverage: Did you get married, divorced, or widowed? Did your debt change? Have any new kids in the house? If you have universal or variable life, do you know how long it is projected to remain in force? Because of changing interest rates and investment performance, a policy you thought would last forever is now going to need higher premiums to do so. Maybe youâ€™ve changed jobs, and the coverage offered at work has changed. Have you accounted for this through your individual policies? Does your coverage match your new income stream?
Any property changes? Did you start a business in your home? You may not have coverage under your homeownerâ€™s policy. Has your homeâ€™s replacement value changed? If your coverage is low and your house burns down you may not have enough money to build it back again.Â What about any boats, cars, motorcycles and the likeâ€”did you add or get rid of any? Do you have any new drivers in the house?
What about your disability coverage? If you were unable to work, would you have enough money to still eat? Does your policy give you enough to take care of you and your family? How about your health insurance? Have you examined combining a high-deductible plan with a health savings account? Are your deductibles too high or too low for your financial situation? Getting older? What are you going to do about your long-term care needs?
As you can see, there is much to think about, and Iâ€™ve just scratched the surface. If you feel overwhelmed by this, feel free to put a lot of the burden on your agent. Thatâ€™s what they get paid to do. Just make sure you understand what they are explaining and recommending. Give them all the information about changes in your lifeâ€¦even if it seems inconsequential. It may make a big difference.
Gary Silverman holds the Certified Financial Planner (CFPÂ®) license and is a member of the Financial Planning Association (FPAÂ®). Gary is the founder of Personal Money Planning, a retirement planning and investment advisory firm. Find out more about Personal Money Planning at the company website or follow on Facebook.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.