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Insurance consulting is offered by Ted and David Demars as independent insurance agents and is not offered by the Investment Advisor.
Unexpected events, such as a severe illness, car accident, or house fire, can put a serious cramp in your financial health, even if you have savings. Having the right amount of insurance will help protect you from the financial consequences associated with many of life’s adversities.
If you have a spouse, child, parent, or anyone else who relies on your support, this is something you should consider having. Life insurance is not just intended to replace the wages you provide but services as well. (For example, a stay-at-home mother may want to purchase life insurance to pay for child care if she dies.) There are two basic types of life insurance: term and permanent (or cash-value). Term insurance is pure life insurance. You pay the premiums for a specific period of time, and the only way the policy will pay out is if you die. With cash-value life insurance, part of your premium pays for the policy and part of it goes into a savings plan. Generally, you can keep the policy as long as you pay the premiums. Addiitonal options include borrowing against the money in the savings plan or canceling the plan and getting cash back.
If you are employed, it is a good idea to have disability insurance, which replaces a portion of your income if you are unable to work. There are two types of disability policies: short-term, which only provides coverage for a limited period of time (usually up to six months to two years), and long-term, which provides benefits until retirement age. Long-term insurance can be the most important insurance to have. If you are only out of work for a few weeks, you should be able to pay for your expenses with savings. However, if putting aside money in savings is a struggle, a short-term disability policy could be a helpful thing to have. Check to see what coverage you have through work before purchasing a policy on your own.
In most states, drivers are required by law to have at least liability auto insurance, which covers your legal costs (up to a limit) if you injure a person or damage property with your car. If your car is several years old and worth little, liability coverage may be adequate. However, if your car is newer, you may want full coverage insurance. (This will likely be required by your lender if you have a car loan.) In addition to liability coverage, it typically includes medical expenses coverage, uninsured motorist protection coverage, collision coverage (which pays for repair costs or replacement due to accidents), and comprehensive coverage (which covers repairs costs and replacement due to damage resulting from other causes, such as theft or fire).
If there is a mortgage on your property, you are required to have homeowner’s insurance, but is your coverage sufficient? It is a good idea to consider if you should increase your coverage when you make improvements to the house. Also, if your policy only pays you the actual cash value for stolen or damaged property, you may want to switch to replacement cost coverage (which pays you what it actually costs to replace the property). Furthermore, if you have expensive jewelry, antiques, artwork, or other possessions whose value exceeds the coverage provided by a standard policy, you can supplement it with a personal article floater.
Renters insurance covers personal property loss and liability for renters. This insurance is relatively inexpensive, especially compared with what it would cost you to replace all your clothing, furniture, electronics, and other property if they were stolen or damaged. Don’t assume that your landlord’s policy will cover your losses – in most circumstances, it won’t.
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