What's the risk of living underinsured?

Norm Boone / May 15, 2018 / Insurance

If you’re underinsured, you’re taking an unnecessary risk that could jeopardize your long-term financial well-being and keep you and your family from achieving your financial goals.

What's the risk of living underinsured? Blog image to accompany article outlining how insurance can help with your overall financial health

If you’re living underinsured, you could be placing your financial health at risk, no matter how diligent you are about other aspects of wealth management. Insurance is a vital component of holistic financial planning.

How so?

Although Mosaic is a fiduciary that does not sell insurance products, we do incorporate risk management and insurance planning in every personalized holistic financial plan we create for our clients.

  • We can work with your current agent or recommend someone with whom we’ve become comfortable.
  • Because we don’t make money from the insurance products you purchase, we are able to provide an objective view of the types of coverage you might need to balance your financial plan and secure your future financial well-being.
  • We can also help you to understand and plan for any possible tax implications of your insurance products.


Types of insurance to consider

Although insurance needs vary, and individual needs and goals inform every insurance product recommendation we make, some common types of insurance to consider include:

  • Health insurance
  • Life insurance
  • Property & Casualty Insurance
  • Long-term disability insurance
  • Long-term care insurance

Here’s how each one can fit into a holistic financial plan.


Health insurance 

Going without health insurance is simply not a reasonable option, but do you understand how your choice of a health insurance plan affects your overall financial well-being? What are the tax implications of a high deductible health plan paired with a health savings account? When must you enroll in Medicare, and how do you choose the Medicare plan that’s right for you? We can help you answer these questions and gain perspective on the role your health insurance plays in your holistic financial plan.


Life insurance 

Many people assume that life insurance is solely for income replacement, and that their need for it will decline or even disappear as they grow older. However, life insurance can help fund your family’s financial goals after you’re gone, such as college, or serve as a legacy for your heirs.


Property and Casualty Insurance  

You probably have insurance on your car, your home, and maybe you have an umbrella policy.  Odds are that you haven’t updated them in a while and the coverage might have gone out of date or don’t take advantage of some of the new options.  This is basic coverage, but too often, people put it in a drawer and forget about it.  We help by reviewing the policies, asking the right questions and guiding you so that your coverage is as completed and up to date as possible.


Image 2 -  risk of living underinsured? Blog image to accompany article outlining how insurance can help with your overall financial health

Long-term disability insurance 

A typical healthy, non-smoking 35-year-old who works in a low-risk profession has a 38 percent chance of becoming disabled for five years or longer at some point in his or her working life, according to the Council for Disability Awareness. Long-term disability insurance can help insulate your family from the loss of income that’s often associated with a lengthy or permanent disability.


Long-term care insurance 

As you grow older, your chances of needing long-term medical or assisted care can increase. Medicare, long-term disability, and health insurance often don’t pay for this type of care, or if they do, the coverage is limited. Long-term care is designed to help pay for ongoing medical or assisted care, either in a qualified nursing facility or at home. Policy options vary, so you should be sure that you understand the coverage offered, and whether it will meet your health needs and financial expectations.


Honorable mentions go to earthquake insurance and umbrella insurance, which may be applicable to your situation after review.

Whats the risk of living underinsured? Risk management is a critical aspect of holistic financial planning. Insurance is an important tool for mitigating the financial risks that are associated with a loss of health, income, or life.

And before any loss comes the everyday peace of mind, knowing that your long-term financial well-being is covered.


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Topics: Insurance