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What Every Mom Needs to Know About Insurance

Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

As parents, it’s our responsibility to make sure our kids are cared for. We go out of our way to keep our kids safe, from buying bicycle helmets to Band-Aids to winter coats, right down to holding their hand when they cross the street.

Most of us worry endlessly about our kids’ well-being. I know I do! But as much as we worry about the little things, it’s sometimes easy to let the big things—those risks and dangers that are a little more intangible—slip by ignored or unattended to.

A big part of protecting our kids, as well as securing financial peace, is making sure our families are covered for the big things—natural disasters, an injury or illness, job loss, or worse.  Even so, it can sometimes be hard to determine exactly what coverage you need, especially when it seems like most insurance salesmen only want to play on your emotions.

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When money is tight, you certainly don’t want to overspend on coverage that you don’t need, but you need be protected from major catastrophe. The best approach is to do your research ahead of time and be aware of the state of your family’s finances before you get a sales pitch.

If you follow Dave Ramsey’s plan for Financial Peace, you already know you should consider seeking the advice of his Endorsed Local Providers. These insurance, investing, real estate and tax professionals meet both Dave’s criteria and an independent set of standards to earn his endorsement. His ELPs have the heart of a teacher and want to make sure you get the help you need. It’s great to have a local provider that’s already vetted, so you can trust them before you even walk in the door.

And while I am personally a big Dave Ramsey fan and would much rather use one of his ELPs than go it alone, it is also important to remember that it’s not the insurance agency’s role to make sure you’re getting the best deal on insurance. It is up to you to be your own advocate and to get the best rate. Insurance isn’t something you can put on the back burner and just pay each month.

To get the best rates, you must continuously (at least once a year) revisit your insurance policies and do some comparison shopping. Plans and offers are constantly changing to meet the needs of the market. Rates can fluctuate as your family’s needs and situation change as well. Adding another driver, building on an addition to your home, changing your security system, or bringing a new member of your family into the world can all raise insurance questions and call for a little guidance.

According to Dave, there are seven types of insurance that you need: Homeowners/Renters, Auto, Health, Disability, Long-Term Care, Identity Theft, and Life.

 Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

Home

 If you’re paying a mortgage, the lender requires homeowner’s coverage, but even if you’re lucky enough to own your home outright, you want to be sure that you’re protected. Seeing as my home has been through one too many hurricanes, I can tell you that we’re aware of the amount of damage a home can sustain in such a scenario and just how much coverage is required to get us back on our feet. Don’t be caught without enough insurance to get you back to dry land.

For renters, insurance protects your possessions in case of fire, theft and, in some cases, flood. Renters insurance is often thought of as optional, but as a parent, you must cover yourself in case of tragedy. Renters insurance is often really quite inexpensive (less than $20/month!) and it’s very important if you have big-ticket items that might be difficult to replace, such as audio equipment, collectables, exercise gear, televisions and appliances. Take inventory of your household and make a list of those larger items that could be damaged or stolen, and would result in major financial hardship if you’d have to replace them.

There are several ways to save on homeowner and renter’s insurance. You can raise your deductible, combine policies and do some home improvements and emergency preparations to raise the protection level on your home. Improvements to home security can also help you save, as can new windows, doors, and extreme weather protection.

 Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

Auto

 When we think insurance, auto insurance is often the first thing that comes to mind. Driving is possibly the highest risk activity that any of us do almost every day, and we all know the importance of having liability coverage. In many states, it’s now illegal to operate a vehicle without liability insurance or proof of financial responsibility.

In our litigious society, unfortunately, coverage is mandatory to protect yourself from financial ruin in case of an accident or driving mistake. One moment can change your life and the life of another driver forever. Trust me, your mind will be at ease when you know you’re protected.

When it comes to auto insurance, the value of your vehicle is important when you’re determining the amount of coverage and type of insurance you need. If your car is in its twilight years, you may feel comfortable with less coverage or just liability. If you have a newer car (or if you’re paying off a car loan), you need to have full coverage to keep your investment safe.

There are several other ways to save on car insurance. Shop around, compare rates, and don’t become too loyal to just one agency or provider. There are good driver discounts, multiple car discounts, and even good grade programs for driving teens and students. Installing safety upgrades or attending defensive driving courses can also help lower your monthly payments and save you when it comes to paying for coverage.

 Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

Health

 Health insurance is so important. As parents, we know we must take children to the doctor for regular checkups. We also know that serious health issues can come out of nowhere—and without coverage they can leave households financially devastated.

Many employers offer health insurance, but if yours does not, or if you’re independently employed, private insurance providers are more affordable than you may think. Under the Affordable Care Act, you may qualify for low-cost coverage based on your income.

Consider a Health Savings Account and/or a high deductible plan to save the most. An HSA can save families thousands of tax-free dollars every year, which you can use toward your deductible, so your monthly premium will be lower. You can use your HSA for prescriptions, and depending on the plan, eye exams and preventative care.

Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

Disability

 Disability insurance should cover 65% of your income and most employers offer disability coverage. It’s often something that’s overlooked, but one in seven workers will face a disability before retirement.

You should be sure your disability insurance is long-term. If you follow Dave Ramsey’s Seven Baby Steps toward financial peace, you should have 3–6 months of expenses saved up, which would cover your needs in the case of a short-term or minor disability. It’s the long-term scenarios that you should plan for. Most disabilities (90%!) are not covered by worker’s comp or social security.

The effects of a disability can financially ruin a family if you’re not properly prepared. Many workers facing disabilities can be out of work for three years or more. Consider what would happen to your family should they face an unforeseen accident or tragedy that leaves you unable to work.

 Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

Long-Term Care

As a parent, long-term care is not necessarily something that’s on any of our minds, but it’s a necessity for anyone over age 60. If your parents cannot afford long-term care insurance, this may be something you want to consider.

Consider the scenario of a parent who is facing a condition like dementia, Alzheimer’s or Parkinson’s disease, and requires long-term care. This situation can quickly eat up your parents’ retirement savings and even dip into your own savings and accounts. Those who qualify for Medicaid will receive some assistance, but it often leaves patients with limited options and plans for complete care.

As you near your 60s, long-term care should be on your horizon and part of your post-retirement financial plan. It’s a way to make sure you don’t financially burden your children or spouse and ensures you won’t leave them unable to make ends meet.

 Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

Identity Theft

If you’ve never faced the horror in dealing with having your identity stolen, then consider yourself very lucky. With data breaches on the rise among major retailers, it seems like everyone is at risk. Identity theft can cost you big-time in terms of time, money, effort, and just general headaches. In a worst-case scenario, identity theft can damage your credit and make recovery very difficult—even if you’re an innocent victim.

Part of your insurance portfolio should include identity theft protection. You should be sure it includes an identity restoration service that can fix the damage and get your identity restored and safe once again. Teaching your family good identity-safety habits such as limiting your exposure online and protecting your passwords can help protect you as well, but should the worst happen, insurance will be a lifesaver.

 Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

Life

Life insurance can be a little confusing. The general rule of thumb is you need term, not whole life. Cash value insurance can sound like a great way to invest and save money, but truth be told, it doesn’t offer high returns at all and generally is a poor performing product.

Term life insurance, on the other hand, is a way to cover yourself until you’re debt free and in a position to invest. It offers a way to help your spouse or children settle your estate and survive in relative comfort should something happen to you. Dave offers a calculator on his website to help you configure the amount of term insurance you need to cover your family in the worst-case scenario.

Term life insurance can help you cover burial costs and the costs of paying off your debt, plus further support of your family, particularly if you’re the sole breadwinner.

Facing uncertain scenarios in life is always unsettling, but having the proper insurance coverage can ease your mind and allow you to sleep a little easier at night. Look into the faces of your children and think of all the ways you would love to keep them safe. Insurance is one of the most simple, practical, and logical ways to protect your loved ones. 

This post was underwritten by Dave Ramsey’s Endorsed Local Provider program. If it’s time to evaluate your insurance policies (or maybe add one you don’t have yet!), talk with the insurance agent in your area Dave recommends to give you top-quality service. It’s free, and since these independent agents aren’t tied to one company’s insurance policies, they can search for a policy that gives you the best coverage for the best rate!

 

Every Mom Needs to Know About Insurance | Budgeting 101 | Home 101 | Insurance | Money Saving Tips | Saving & Investing

9 Comments

  1. Amanda
    May 8 at 11:33PM

    As an insurance producer I cringe when o hear others talk about shopping around with their insurance. Though you may get a”better rate”in the short term, the longer picture looks different. Insurance companies use a fast amount of information to rate your insurance (come up with a premium) insurance hoppers get worse rates because they are an unreliable investment.

    Definitely shop around but don’tleave a company you trust because it’s cheaper elsewhere.

    • Jennifer
      May 12 at 07:16PM

      I have to agree with you Amanda. I’m an insurance producer as well – this is frustrating to see that people leave their current company because they found rates “lower”, when in fact there is a very high possibility that you are losing money by leaving your current carrier. Loyalty is huge with insurance – stay and maximize your savings. Ask your agent what they can do to help with your premium. Besides its best to make sure you’re properly insured when an accident happens, than to be stuck with a large law suit that can wipe away everything you own.

  2. May 20 at 06:49PM

    This is a great post Ruth! I’d also like to add that a wonderful alternative to traditional health insurance is Christian Health Ministries or Good Samaritan Ministries. They function similar to health insurance, but often have higher payouts and less costs for the consumer 🙂

  3. Dr. Jeffrey Adams
    May 22 at 08:54AM

    I’m glad that motherhood issues were included, not to mention their health insurance. Talking about this kind of matter with your
    mom would let her think that they’ll never alone on the path they were facing. Thanks. Will take note of these. Based on infolongtermcare site — the ltc insurance site, the average annual cost of an assisted living community is around $41,124, while a private room in a nursing home cost $94,170 annually, these amounts would eat up right off the bat your savings. So for me health insurance is the one that we should need to focus on, as early as now.

  4. Annie
    July 7 at 07:22PM

    I was recently out of town and of course my youngest kiddo got sick. We found a walk-in clinic and got a prescription for an antibiotic. We made our way to the pharmacy and at this point I realized that I’d forgotten my prescription insurance card… I was kind of freaked out because I had never been in that situation before; (much less with a vomiting toddler and a cranky middle schooler) but the girl working at the pharmacy told me about a website where I could find discounts on prescriptions: http://WWW.MEDFISHER.COM. I put in the name of the medication my son was getting and immediately found a voucher for savings. I was able to just hand my phone over to the technician at the pharmacy and she put the voucher information on file and we got a discount of $35 dollars off of the cash price! Since we have a high deductible plan the MEDFISHER price was better than what my insurance price would have been anyway. I had never thought of trying to find savings on our prescriptions before. I hope this info helps someone .

  5. Sandra
    June 23 at 02:54AM

    PMI is tax deductible and, re Dave Ramsey’s providers…trust but verify. You need to check them out as well. One of “his guys” was happy enough to take my money but had to be “encouraged” to give me the help I needed.

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