Insurance: Should I have either disability or flood coverage?
Dear Friends:
The topic of disability or flood insurance is a fairly dry one. I can’t say that I’ve had many riveting conversations with friends lately around those two issues. However, considering where your risks exist and knowing the extent to which you are willing to absorb those risks is an important “to do” as a head of household.
In my book with Jeremy White, Complete Guide to Faith-Based Family Finances, I mention that, “the basic purpose of insurance is to transfer a risk that you’re not willing or able to take to someone (usually a company) willing to take the risk in return for compensation.” (P. 431) We are fortunate to live in a society where we can insure just about anything – weddings, a pet’s health, homes, cars, an income, etc., etc. Insurance in America runs the gamut from the ridiculous to the sublime.
On the topic of disability insurance, I would like to remind you that you have a higher probability of suffering some sort of disability between the ages of 35 and 65 than you have of dying within that time frame. (Complete Guide to Faith-Based Family Finances, p. 433) So, considering a good disability policy is wise. As you do so, remember that disability income coverage is a specialty and many agents are not as knowledgeable in this area as in property or life insurance. Therefore, if your employer does not offer coverage as part of group benefits, be sure to shop around and seek out a qualified insurance agent with a breadth of knowledge in this area.
In summary, I will return to what I said in the video, which is that insurance decisions go back to prioritizing your cash flow choices. Insurance costs are costs that relate to future planning and care on behalf of your family. Balancing the way you spend on your present needs with the way that you spend for future needs and plans is something that needs to be undertaken carefully and prayerfully. Today’s needs always feel more urgent than tomorrow’s needs, but applying wisdom in both the present and the future will provide a smoother path for your family in the long term.
Blessings,
Ron
Click here for the video transcript
The topic of disability or flood insurance is a fairly dry one. I can’t say that I’ve had many riveting conversations with friends lately around those two issues. However, considering where your risks exist and knowing the extent to which you are willing to absorb those risks is an important “to do” as a head of household.
In my book with Jeremy White, Complete Guide to Faith-Based Family Finances, I mention that, “the basic purpose of insurance is to transfer a risk that you’re not willing or able to take to someone (usually a company) willing to take the risk in return for compensation.” (P. 431) We are fortunate to live in a society where we can insure just about anything – weddings, a pet’s health, homes, cars, an income, etc., etc. Insurance in America runs the gamut from the ridiculous to the sublime.
On the topic of disability insurance, I would like to remind you that you have a higher probability of suffering some sort of disability between the ages of 35 and 65 than you have of dying within that time frame. (Complete Guide to Faith-Based Family Finances, p. 433) So, considering a good disability policy is wise. As you do so, remember that disability income coverage is a specialty and many agents are not as knowledgeable in this area as in property or life insurance. Therefore, if your employer does not offer coverage as part of group benefits, be sure to shop around and seek out a qualified insurance agent with a breadth of knowledge in this area.
In summary, I will return to what I said in the video, which is that insurance decisions go back to prioritizing your cash flow choices. Insurance costs are costs that relate to future planning and care on behalf of your family. Balancing the way you spend on your present needs with the way that you spend for future needs and plans is something that needs to be undertaken carefully and prayerfully. Today’s needs always feel more urgent than tomorrow’s needs, but applying wisdom in both the present and the future will provide a smoother path for your family in the long term.
Blessings,
Ron
Click here for the video transcript
I was disabled at age 53 due to a mental illness. I did not expect to become disabled, but I could have been more prepared, considering I was in therapy and knew others with my illness who were disabled. I had a disablity policy through my employer. But it only covered 18 months because it was a mental illness, not a physical one. I could have afforded to buy a longer policy from an outside company, and wish I had. Now I struggle to live on Social Security. Please learn from my mistake.
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