It is here! June 28 brings us the widely celebrated and mysterious — National Insurance Awareness Day. With all “widely celebrated and mysterious” days of recognition, we likely need to explain.
While the origins of National Insurance Awareness Day are not clear, the sentiment is important. The goal of National Insurance Awareness Day is to set aside one day each year to take a closer look at your insurance coverages. Do you have the right kinds of coverages? Do you have too much or too little coverage?
We recommend going a step further. As long as you are taking a look at your insurance coverages, it is also a good idea to identify your overall financial exposure and financial opportunities. So in the spirit of National Insurance Awareness Day, here is your Insurance / Financial Review Checklist broken into 4 Key Areas of Review:
1. Personal Property
- Homeowners’ or Renters’ Insurance should help protect against large unforeseen damages or losses. It is important to understand what is covered and more importantly what is not. Based on your specific circumstances, you may need to consider secondary coverages, such as flood insurance.
- Auto Insurance varies widely based on what you expect to cover. A basic collision policy protects against personal injury expenses while a comprehensive policy pays for the replacement of your vehicle. As your vehicle ages, it may make sense to drop the level of coverage you carry.
2. Benefits Assessment
- Health Insurance (and related benefits)
- Your health insurance plan should provide you with coverage for many essential benefits and limit your overall out-of-pocket exposure. Plans vary dramatically so it is important to carefully review each plan available (such as, what is covered, what out-of-pocket expenses you have, what expenses count towards your deductible / out-of-pocket limits). If you are uncertain of the benefits, ask you employer or insurance provider for a Summary of Benefits & Coverage document.
- Health accounts (such as a Flexible Spending Account, Health Savings Account or Health Reimbursement Account) help individuals pay for out-of-pocket expenses and deductible expenses not covered by an underlying health insurance plan. While the specific rules governing these accounts vary, all accounts provide an opportunity to set funds aside either individual or employer funds for eligible medical expenses on a tax-free basis.
- Ancillary Benefits
- Commuter Benefit Plans help make your daily commute to work a little more affordable with pre-tax mass transit and parking benefit options available.
- Supplemental insurance or benefit plans, such as: dental, vision, fixed dollar, specified disease, or hospitalization policies, can fill gaps in your benefits.
- Wellness incentive programs are becoming more and more popular at employers across the country. These programs often provide financial incentives to maintain, improve or practice healthy lifestyle behaviors.
3. Retirement Planning
- Many employers offer a 401K (or similar retirement savings account) to aid employees in saving for retirement. Understand what you are currently contributing and when funds are fully vested. If your employer makes contributions, are you required to contribute in order to receive a match or a higher percentage?
- Individual Retirement Accounts (IRAs) can be used to save additional funds on a tax-favored basis.
- Personal Savings and/or Investments can be used as an additional source of income in retirement.
4. Security of the Unknown
- Life Insurance is intended to provide your loved ones with financial security following your passing. The amount and type of life insurance you carry will vary depending on your personal circumstances. Some policies are limited to funeral and burial costs, while other plans are intended to provide long-term financial security.
- Disability Insurance can be long-term or short-term. It is intended to provide you and your family with an additional income source when you are unable to work due to disability.
- Long-term care Insurance reimburses policyholders a daily amount for services to assist them with activities of daily living (such as bathing, dressing, or eating) which are not otherwise covered by health insurance, Medicare or Medicaid.
DISCLAIMER: Benefit Resource is NOT an investment advisor, tax consultant or insurance advisory. Statements are provided as a basic guide for the areas an individual should consider and should not be taken as specific recommendation or advice. Always consult an investment advisory, tax consultant or insurance advisor.