Insurance Planning


Insurance Planning

Insurance Planning

Don't Neglect Insurance Planning

You work hard to bring home a paycheck, provide food and shelter, and accumulate wealth, so you don't want to leave these important issues to chance. Whether it is protecting your income, your life, or your home, making sure that you're adequately insured can save you from financial ruin in the event of an unfortunate accident. Make sure that you're covering the most important aspects of your life while spending money only on the insurance that you really need. Our advisors at the Financial Dream Team can assist you with your insurance needs with competent and reliable insurance companies. In addition, some of our advisors offer insurance products as they are qualified insurance agents.

Types of Insurance Policies You Need

You can find an insurance policy to cover almost anything imaginable but only a handful of policies are actually ones that you need to have. You work hard throughout your life to build wealth and live a happy and comfortable life, so some types of insurance can protect your possessions, income and even provide for a loved one when you are gone.
Health Insurance

One of the most important types of insurance to have is health insurance. Your good health is what allows you to work and earn money and otherwise enjoy life. If you were to come down with a sickness or have an accident without health insurance you may find yourself unable to receive treatment or even in debt to the hospital.
Life Insurance

This type of policy is more important if you are married and/or have children. Your life is valuable because it is what allows you to work and earn an income to provide for your family. When you are gone you create an income gap which could put your spouse or children in financial trouble.
Property Insurance

One type of policy that for most people that is actually mandatory to have is homeowners insurance when you have a mortgage. If you borrow money from the bank to purchase a home they will require the asset to be insured. For many people this insurance premium is built into the mortgage payment. For many people their home is their greatest asset so it is vital to adequately protect it.
If you rent instead of own, a renters insurance policy is just as important. Your belongings inside the dwelling can add up to a significant amount of money. In the event of a burglary, fire or disaster you should be able to at least have a policy that can cover most of the replacement costs.
Auto Insurance

Another type of policy that is often required is auto insurance. Most states require by law that you have basic auto insurance. While it may be a law, too many people still drive around without it.
Umbrella insurance

(From Wikipedia, the free encyclopedia)

Umbrella insurance refers to a liability insurance policy that protects the assets and future income of the policyholder above and beyond the standard limits on their primary policies. It is distinguished from excess insurance in that excess coverage goes into effect only when all underlying policies are totally exhausted, while umbrella is able to "drop down" to fill coverage gaps in underlying policies.[1] Therefore, an umbrella policy can become the primary policy "on the risk" in certain situations. The term "umbrella" refers to how the policy shields the insured's assets more broadly than primary coverage.

Typically, an umbrella policy is pure liability coverage over and above the coverage afforded by the regular policy, and is sold in increments of one million dollars. The term "umbrella" is used because it covers liability claims from all policies underneath it, such as auto insurance and homeowners insurance policies. For example, if the insured carries an auto insurance policy with liability limits of $500,000 and a homeowners insurance policy with a limit of $300,000, then with a million dollar umbrella, the insured's limits become in effect, $1,500,000 on an auto liability claim and $1,300,000 on a homeowners liability claim.

Umbrella insurance provides broad insurance beyond traditional home and auto. It provides additional liability coverage above the limits of homeowner's, auto, and boat insurance policies. It can also provide coverage for claims that may be excluded by the primary policies. These may include, but are not limited to: false arrest, libel, slander, invasion of privacy.


[1] Powerine Oil Co., Inc. v. Superior Court, 37 Cal. 4th 377 (2005).

Types of Insurance Policies You Don't Need

There are some types of insurance that you absolutely should have but there are just as many that you are probably better off without. Some of these policies may sound like a good idea when in reality all you are doing is wasting money on the premiums.

Mortgage Life Insurance

This type of insurance is receiving more media coverage lately but is probably a policy you can do without. Mortgage Life Insurance is a policy that promises to pay your mortgage payment in the event you become disabled or die. If you are married this sounds like a pretty good idea, right?

Well, not exactly. This is really only overlapping your existing life insurance policy that you likely already have through your employer or through a separate policy. With a standard life insurance policy the beneficiary receives the benefit that can be used for any reason they choose, including the mortgage. Why pay an additional premium for something that your life insurance policy can pay for?

Travel and Flight Insurance

These policies are another area that may simply require you to pay a premium for insurance that overlaps coverage you already have. First, check your current health and life policies to see how incidents resulting during travel or flight are covered. More than likely there is some sort of coverage included.
You will also want to check with your credit card if you use a card to book tickets or arrangements. Many credit cards automatically come with some basic coverage when they are used to purchase the tickets. If you find that you still need some additional coverage you can at least only purchase what you need that is above and beyond what you already have.

Cancer Insurance

Cancer insurance is becoming very popular recently but is it a good idea? The reason this is generally such a poor insurance choice is that first of all, your primary health insurance generally covers medical expenses related to cancer treatment.
The most shocking reason this can become a waste of money is that most cancer insurance doesn't even cover skin cancer, the leading type of cancer. Not only that, but cancer insurance typically doesn't even cover outpatient expenses related to the cancer treatment.

Unless your health insurance specifically does not cover cancer related expenses or you have a high likelihood of getting a specific type of cancer that could be covered by a policy, you are more than likely wasting money on a premium you could be using elsewhere.