GMR 133: Common-Sense Reasons to Buy Insurance Coverage
You can do many things right to manage your money well and ensure a good financial future, but if you fail to add adequate insurance to your strategy, you could lose big! In this episode of GMR, we talk with Harry Stout, the author of Today’s Life Insurance - A Protection Tool for Your Future. His many years of experience in the insurance industry will help us understand the role insurance play into our financial lives, and why this one choice is so crucial to our success.
Show Notes
7 Areas To Consider Buying Insurance Coverage
We need to understand the risks we all face in our financial affairs. In my books, I have highlighted 7 areas where insurance should be considered.
Disability – The risk of becoming physically or mentally disabled and not able to continue to work.
Property Damage – The risk of having your property damaged by accident, by another person or by an act of God.
Health – The risk of becoming ill and not having sufficient resources to pay for the costs of care, including long-term care for older individuals.
Premature Death – The risk of dying too young and not being able to earn the income and accumulate the assets necessary to support your needs or leave funds to provide for the future needs of your dependents.
Debt – The risk of accumulating or relying on too much or too costly debt such that the debt cannot be comfortably repaid from current cash income.
Liability – The risk that you will physically, emotionally, professionally, or financially harm someone in an accident in your car, home, or other physical or digital location and are held legally responsible to pay cash damages to the person you harmed.
Longevity – The risk that you live a very long life and won’t have the cash income to pay your living expenses. It is the risk of running out of money in old age when you are unable to work. The risk of running out of money in old age is a major concern in our society today.
Common-sense benefits That Can protect you and your dependents from life’s uncertainties
Cash for future delivery when it will be needed to cover the losses and pay the related bills (e.g., buy a replacement house or vehicle damaged by fire or accident).
Cash flow certainty. Insurance provides guaranteed coverage in exchange for the premiums you pay. You are certain that if a loss takes place cash will be available to offset all or a significant financial portion of the loss.
Income or spending potential for your later years (e.g., from annuity products).
Protection of your income from disability (e.g., disability insurance).
Support to qualify for a loan (e.g., car and home insurance).
Financial security for your family so that they know if something happens to a breadwinner that cash will be available to pay the bills or keep them in their home.
Psychological peace of mind knowing that you have taken care of your financial responsibilities in case something happens to you.
Creating long-term savings habits (e.g., buying cash value life insurance and paying for it over a number of years).
Other Insurance Questions Answered in This Episode
What are the key risks life insurance protects against?
Are there other reasons that prevent people from buying the life insurance protection they need?
Reasons why a person should not buy coverage.
What are the hidden benefits of life insurance?