Don’t let presumed costs deter your insurance decisions
The No. 1 reason to purchase an insurance policy is to cover expenses that would otherwise create a financial hardship for you or your family. Many policies are often employer-sponsored, but if you don’t have access to affordable options or would like to review potential financial vulnerabilities that could be covered by insurance, please give us a call.
The following are examples of insurance situations sometimes neglected due to the presumed high cost of premiums or lack of convenient access.
About four in 10 (41 percent) of working Americans receive disability insurance coverage, usually paid for on a limited basis by their employer. However, less than a quarter (24 percent) opt to purchase additional voluntary disability insurance through their employer. First, it’s important to consider how much you might need to supplement the employer-sponsored benefit should you ever become disabled. Second, it appears the grass is always greener elsewhere when you don’t have a lawn — nearly half (47 percent) of workers say their employer doesn’t offer voluntary supplemental coverage, but more than half (58 percent) say they’d buy it if offered.
Next, consider life insurance. It often seems like the people who need it most believe they can’t afford it. For example, about half of single parents with children younger than 18 don’t have any life insurance. Among those with three or more children under 18, 70 percent have no coverage. The majority say it’s because they believe it’s too expensive.
Interestingly, single parents who can afford life insurance tend to go with a more expensive permanent policy. The majority (77 percent) of single parents with a policy purchased permanent coverage, although this could be because they are addressing additional needs beyond the death benefit, such as supplemental retirement income or leaving an inheritance.
It’s worth noting that life insurance could make a prudent gift from the parents of a single parent. After all, if something happens to the adult child, those insurance proceeds can help the grandparents care for their grandchildren.
When making travel plans, travel insurance is a popular trend these days. It’s not a bad idea given the problems some airports have had in recent years due to power outages, computer glitches and weather incidents. For example, more than 4,800 flights were delayed and 840 flights canceled during Easter weekend this year due to severe weather.
There are a wide variety of travel insurance options, including coverage for canceled flights, medical expenses and evacuation expenses. Fortunately, travel insurance can be relatively affordable compared to the cost of a vacation; many plans start at just 4 percent of the trip cost.
Raymond C. Lantz, Jr. is the president and founder of USA Wealth Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with Ray Lantz on WBSM 1420AM or on the Radio Pup app.
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Guarantees and protections provided by insurance products are backed by the financial strength and claims-paying ability of the issuing insurer.
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.