INSURANCE & RISK MANAGEMENT

In business, risk managers assess their companies’ internal and external risks and takes steps to limit them. This same process can be used in your personal life. Many of us already exhibit a form of personal risk management by owning automobile, home and renter’s insurance to protect ourselves financially against their loss or damage. Others also own life insurance to financially protect our families when we’re gone. When used properly, insurance is a wise investment (like storing grain for winter months – Proverbs 6:6-8) to safeguard our families against loss or potential financial disasters.

Here are some guidelines to think about when planning for insurance coverage in your budget:

Life Insurance

Life insurance has many advantages besides helping to provide financial security for your heirs. You can also tap into the benefits of permanent life insurance while you are still alive. Be sure to compare your company’s rates with term insurance you can buy on your own. In some cases, you may be able to get a better price purchasing the insurance on your own.

Disability Insurance

Many people, with and without DI insurance, prepare for short-term disability possibilities by establishing an emergency fund of one month to six month’s salary. It is when disability lasts for many months or even a lifetime, that your finances can crumble without help. That help is efficient when it comes in the form of DI insurance, but take care to understand its terms and conditions before buying a policy. No two policies are alike. Most of us are aware of the necessity for medical coverage, but we often neglect disability when determining our insurance needs.

Health Insurance

Couples who are covered under each other’s medical plans could save a significant amount of money by opting out of coverage at one employer. Some companies that allow employees to decline coverage by the company’s insurance plan will pay that employee’s share of the company’s medical benefits to the employee in monthly installments. First, make certain you can get back into the plan you’re leaving if your situation should change. That way you won’t be left without coverage if the “insured” employee is laid off or if you get divorced. Next, carefully examine each policy’s deductible and limitations on coverage.

Medicare

Medicare is the U.S. government’s health care insurance program for the elderly. It is available to persons aged 65 and older and certain disabled persons. Part A is hospital insurance. It provides basic coverage for hospital, nursing, and home health care. Part B is supplementary medical insurance. It covers 80 percent of reasonable health care costs after a deductible each year has been satisfied. With the cost of health insurance it could well be more valuable than Social Security payments.

Are You Prepared For Long-term Health Care Expenses?

The vast majority of Americans are not sufficiently prepared to face long-term health care. They go through their lives reassuring themselves that they will probably never need it. Unfortunately, that may not always be the case.

Decisions about long-term care insurance should be made on an individual basis. And given the wide range of policies that are now available, they can be rather complex. Be sure to account for your whole portfolio before you purchase a policy. A professional can help you carefully select coverage that will protect your purchasing power and your estate without wasting money on areas you could cover on your own.