Although “estate planning” might conjure up images of Wills and Trusts, buying the right insurance is also a part of creating a comprehensive plan for your estate. Of course these days, you can get insurance for just about anything – so, which policies do you really need?
Health Insurance
Maintaining good health is important to your financial well-being because it allows you to keep working and paying your bills. But even the most health-conscious can become sick or injured, so having quality health insurance is definitely a good idea.
If you don’t currently have health insurance, check with your job to see if it is available there. If not, speak with an insurance agent to see what health plan options are available. Paying for insurance on your own can be more expensive, but it could save you a bundle on medical costs.
Property Insurance
Regardless of whether you rent or own your home, you should have insurance. This insurance covers your property (if you own it) and all your belongings, ensuring that you can replace things like your clothing and furniture and jewelry.
If you rent your home or apartment, homeowner’s insurance is your landlord’s responsibility but be aware, your landlord’s policy will not cover your belongings. You should have renter’s insurance for this purpose.
Life Insurance
Your life is your most important asset and one that you can’t afford not to insure. A life insurance policy provides your family with the financial assistance they need after your death. A large policy can provide enough money for your funeral expenses as well as a nice nest egg for your family. Without this extra income, your family may have to sell assets and move to a smaller home.
Car Insurance
While liability insurance is mandatory across the states, comprehensive and collision coverages are not. If you’re involved in an auto accident, your liability coverage will only pay for the other person’s car – not yours. Comprehensive and collision coverages are what will repair or replace your vehicle in the event of a loss. In addition, if the other driver is not insured or is under-insured, you’ll eat the loss unless you have uninsured/underinsured motorist coverage.
Be sure to keep all your insurance policies with your estate planning documents so that your family can find them easily.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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