The Most Important Finance Conversation

When it comes to personal finance, everyone always wants to talk about investing.

Rarely do people want to talk about insurance.

It’s not going to be the thing that gets you out of debt. And it’s not going to be the thing that makes you a millionaire.

That being said, if you spend the next 10 years scraping your way out of debt and building your net worth, insurance is the thing that’s going to help you keep your money if things go wrong.

My goal in this email is simply two things:

1) to help you understand the insurance you need and the insurance you don’t.

Because… you might be surprised.

2) Help you save money on your current plan. Last year I was able to save $980.

The Insurance You Need

There are 7 types of insurance you need. Let’s fly through and make sure you’re covered:

1 - Auto - Make sure you at least have Collision, Comprehensive, and Liability. Shop around! I’ll get to this more in a second.

2 - Health - If you want to save some money on premiums (and you have a fully funded emergency fund), look at a plan with a higher deductible. A high-deductible health insurance policy will have lower premiums and give you access to a health savings account (HSA).

3 - Life Insurance - 40% of families don’t have life insurance. There is a lot of bad information about Life Insurance. Here’s what you need to know. 10x your income in coverage, stick to term, it’s like $20/mo. I use Ethos and highly recommend them.

4 - Homeowners / Renters - Make sure you get dwelling coverage, liability, and personal property. If you are in a flood zone you need to get that separately as it’s not included in your home insurance. If your home value goes up, unfortunately, you have to increase your coverage. I bundle my home and auto with Progressive.

5 - Disability - 1 in 4 adults will become disabled at some point before they turn 67. The cost varies a lot based on your work. Many employers are offering this now. I personally just use my employers.

6 - Identity theft protection - This covers the cost of restoring your identity, including legal fees and wages. Basically, if someone were to drain your accounts, steal your identity, this gives you additional support in getting the case solved and unfreezing your assets. I use Lifelock, but I’m confident there are even cheaper options.

7 - Umbrella - If you have a net worth of over $500k you should get an umbrella policy. This is an extra layer of liability protection. Basically, if you get in a car accident and your auto insurance doesn’t have enough coverage, this helps protect your assets.

When’s the last time you shopped around for Insurance

Most people hate shopping for insurance. They buy a policy, set it, and forget it.

I get it, it’s a pain in the butt.

Last year I decided to finally shop around.

Katey and I have two cars, our home and our rental property all bundled under Progressive.

I used PolicyGenius (not sponsored although I wish it was) and shopped for better car insurance policies.

In speaking to an agent I told them I wanted a higher deductible (because we have an emergency fund already) and listed out the coverages I cared about and what I didn’t.

Right off the bat they found me $800 in savings with some minor changes to my current insurance plan. (roadside coverage and some other nonsense I don’t want).

I then called Progressive and explained to them what I was doing and the savings I was offered.

These companies spend billions on marketing. They will spend a little money to keep you with them.

They ended up offering me a slightly better rate to stay with them, which resulted in an annual savings of $980. Pretty wild for something that took me just a few hours.

Free $50 for Your Child

Last week I had a call with FutureMoney and was really impressed. There goal is to help the middle class leverage the same wealth building techniques the ultra-wealthy have had access to for years.

They’ve agreed to give everyone who opens a 529 plan or Junior Roth IRA for their kids $50 to fund their account. All you need to do is use the code Budgeters50.

They are patenting the Junior Roth IRA. Before FutureMoney, you would have had to employ your child to take advantage, they’re removing this barrier.