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September is “Life Insurance Awareness Month,” so all month long we’ve been talking about how to protect your family (and your assets) in the event of your death. Getting a good term life insurance policy is a great way to do that. Term life policies are incredibly affordable, typically only about $25/month for a health 25-year-old for $250,000 worth of coverage. How can you beat that?
Additionally, term policies are almost always annually renewable, meaning that you don’t have reapply or take a new medical exam each year. Seriously, people don’t realize how important this is. What thatmeans for you is this: Your life insurance company can’t raise your rates or decline to cover you in the event that youdevelop an illness. You’re already covered. So, if you become a diabetic or suffer a debilitating injury, you’re still covered at the same cost – provided you continue to pay your premiums, of course.
So, obviously, we think life insurance is important. But, you can’t just buy a life insurance policy and think that your family is completely taken care of. There are several other pitfalls and productsthat you need to consider if you truly want to protect your family and your assets.
3 Other Ways to Protect Your Family and Assets
Disability Insurance
Yourmost important wealth-building tool is your income. Losing that income for an extended period of time can destroy the wealth that you have built, and it could take decades to recover. Still,purchasingdisability insurance is something that is extremely easy to put off, especially since it can be expensive whennot purchased in a group setting.
One way to decrease the cost is to avoid short-term disability insurance all-together. Instead, build your emergency fund large enough so that you can handlelosing your income for6 months or so. Most long-term disability policies will have an “elimination period” – or waiting period – of 3 to 12 months before benefits kick in anyway, so that emergency fund is important. If you can, enroll inyour employers long-term group coverage. This is usually very affordable (a few bucks a month), and it can typically cover you for2 to 5 years.If you’re purchasing disabilityon your own, try to find a policy that covers your “own occupation” and not just “any occupation.” You may pay a little more for it, but you’ll get a lot more should you ever need to use it.
Last Will and Testament
Here’sanother important layer of protection for your family and assets. You really need to complete a last will and testament, especially if you have kids. Without a will, you’ve elected the government to be in charge of all of your assets. You’ve also elected the government to decide who will raise your children.Who wants that?Personally, I’d rather decide what happens with my kids than some judge.
These days, there really is no excuse for going withouta will. You don’t even have to hirea lawyer to get one. If you don’t have a lot of complicated assets, all you really need is a basic will. There are numerous websitesthat can help you createa state specific, self-directed will…and they’ll do it for hundreds of dollars less than you would spend by going to a lawyer’s office. We got ours from LegalZoom.com(affiliate link), and it only took about 20 minutes to complete. Seriously, stop going bareback on this and get your will today.
Health Insurance
We all know that medical costs can be sky high. But, did you know that medical issues are the number one cause of bankruptcy in the U.S.? Although Obamacare wassupposed todecrease this number, it certainly hasn’t eliminated it. According to USA Today, more than 1.7 million Americans still lived in a household experiencing a medical bankruptcy as recently as 2013.
While the success of Obamacareis debatable, it does allow low-income families the ability to have some sort of coverage. Again, that speaks nothing to the quality of the coverage available, but it is better than nothing. Low-income families can also apply for subsidies to decreasetheir premiums and deductibles. Self-employed people have found it a little more difficult to obtaincoverage. One great way to cover your family withoutthe exorbitant costs of Obamacare is to look at healthcare sharing ministries. While not a perfect option, they are a way to protect your family in today’s health insurance climate.
Wrapping It Up
There have been times in my life when I have gonewithout protection in many of these areas. I’m not proud of it, and it can really be a scary. Over time, I’ve learned that making money should only be part of my long-term financial plan. And the same should gofor you.
Smart financial planning means protecting yourfamily from losingeverything that you’ve built due to acatastrophic event. Consider using these protective options today.
What measures have you taken to protect your family and assets?