Insurance (Photo credit: Christopher S. Penn)
We just finished our 5th Financial Peace University class the other night on insurance, and I read the chapter in Dave Ramsey‘s book about insurance. I know there are some areas where we aren’t protected, but boy I didn’t realize how clueless I am about insurance. You know how it is always said about protecting yourself from a rainy day? Well, I thought our family was pretty protected, but I was wrong.After the class I ran home and got identity theft protection, because that was the easiest thing for me to understand. Dave Ramsey recommended getting a company that does more than monitors your credt, because honestly I can do that myself. It is the many hours of having to clean up the mess of someone stealing my identity that I want to avoid (because remember I don’t have much time:).
Another area that was covered in the class was life insurance. This is the area I thought we had covered, but I didn’t really know what I was doing at the time. I thought well isn’t more better? So, I think we have it covering too long of a time period and are paying too much. We did do a few things right. We got term insurance but we got it for 30 years and by that time we should have enough wealth built and debt will all be paid off that we won’t need it. So to get our monthly payments down we could get 20 year term life insurance. I still need to follow-up on this area.
Long term disability insurance is something I know we should probably get, but I just didn’t know where to look or begin. I am still looking and researching the options. We did use the Endorsed Local Provider that Dave Ramsey recommended, but I haven’t heard back from them yet. I also looked at Zander Insurance, another recommendation from Dave Ramsey, but I want to shop around before we make a decision.
I heard Dave Ramsey’s radio program for the first time the other day and he advertised for buying gold and silver, but in his books he talks about not investing in gold/silver because they are not a good return on your money. That was the moment I stepped back and stopping sipping the Kool-Aid (my husband says I am becoming a cult follower of Dave Ramsey) and realized, “Hey Dave is trying to make money too, so I better shop around!”
Now to auto insurance (if you are starting to feel overwhelmed, you are right with me) which is another area I thought we had it right. Well, once again not so much. I need to check to see if we have a high deductible (because we have now finished step 1: $1,000 of savings in the bank!) to keep our premium down. So, I called and figured out that we had $50,000 coverage for collision coverage. So it real life terms, if we caused a five care pile-up our insurance would only cover $50,000 of the damages and we would be responsible for the rest!!!! So, to say the least I pumped our coverage to $500,000. You would think the monthly premium would have skyrocketed…nope not true. After we raised our deductible to $1,000 and $500,000 liability our monthly premium actually stayed the same!!!
Next week I need to purchase an umbrella policy. Our insurance company said it would be about $19 a month. So, bottom line with an umbrella policy is if you get sued for more than you are covered the umbrella protects your personal assets (at least that is what I understand).
Hopefully this post will help you navigate through the scary world of insurance We are still trying to navigate this scary world too !