Phase Four, Ltd. |Insurance FAQs

I already have insurance. Do I need more?

If you haven't examined your insurance policies: life, homeowner's, disability, and other policies lately, they may no longer meet your needs. Your financial circumstances may have changed.

You may have too much of some kinds of insurance. For example, if you're older and your children are through college, you may not need as much life insurance as you once did.

How do I know if I have enough insurance?

You need to assess your insurance needs in light of a broader approach called "risk management." First, determine how you can avoid or reduce risks. As an example, stop smoking.

Insurance should be used to cover only those significant risks to your person, your property, and your assets that you cannot avoid, reduce or self-insure. It isn't merely a question of having enough (or too much) insurance. It is a question of whether you have the right kinds of insurance.

What kinds of insurance do I need?

Most people should be covered by some form of health insurance, including catastrophic health insurance, more commonly known as long term care insurance. If you own a car or a home, it's essential that you have coverage for them. Workers should have disability coverage. Most adults need life insurance. In many instances, you can obtain life insurance through your employer; this may take the form of group term, group whole life, or group universal life insurance. Coverage need depends on personal circumstances.

Again, the key is to assess your needs. Insurance is a safety net. Premature death, disability, a long-term illness, lawsuits, the loss of your home or car... could wipe out the assets you've worked hard to accumulate.

Do I really need disability insurance?

Working people often overlook disability insurance. Statistics show that you are four times more likely to be disabled for at least 90 days before the age of 65 than you are to die. Social Security disability coverage is difficult to get (85 percent of the claims are denied) and usually not adequate. A disability policy can replace much of your lost income until you recover, or for the rest of your working life, if necessary.

What other types of insurance are overlooked?

Personal liability insurance. Even if you do not work in an occupation vulnerable to malpractice lawsuits, you should have sufficient personal liability coverage for injury, libel, slander, and other liabilities.

Sometimes it's a simple matter of beefing up your coverage through an umbrella policy, which extends the liability coverage provided by your auto or homeowner's insurance.

Long-term care insurance. Extended home health care or a stay in a nursing home can financially devastate a family. Long-term care insurance can provide badly needed benefits to help pay the costs. Anyone in their 50's or 60's, with assets to protect, should consider this insurance.

Is there insurance I should be careful to avoid?

Many insurance experts agree that people should not purchase credit insurance to pay off a mortgage or other outstanding loans if they die or become disabled. It usually is expensive and less flexible compared with other sources of coverage.