This is a guest post series by Brian Poncelet who is an independent certified financial planner (CFP) working in the financial services industry since 1994. Along with insurance, Brian Poncelet focuses on mortgage and retirement planning.
Everyone likes to talk about rates of return, but as my dad always said “your health is the most important thing! Yes, we may lose our job or we can have a set back in business, but without our health we can’t bounce back from life’s misfortunes.”
Life, disability and critical illness insurance are often overlooked and certainly not discussed in the media because they are not fully understood. Ask yourself, if you could choose between two jobs, one paying $75,000 with no benefits or a job paying $72,000 and a salary for life should you become sick or disabled, which one would you choose? Most people would choose the one with benefits, because after taxes, $3,000 makes little difference to their financial security.
Today, employers are watering down company benefits because costs are rising much faster than inflation due to our aging population. As a result benefits are cut, through the use of “flex dollars” (fixed dollars to buy benefits) or changing insurance companies. Who really reads the company’s benefits hand book…very few of us…that is, until we actually need to make a claim.
Some times it is better to get your own private insurance plan, one that no one can take away or modify without notice, especially if you may not be with the same employer for the rest of your life.
FrugalTrader has given me the opportunity to discuss the topic of insurance. Certainly this topic is complex. My intent is to provide a broad overview in 3 weekly submissions, beginning with Life Insurance. The topic of disability insurance will then follow. Finally, I will wrap up with Critical Illness Insurance. As you are reading the series, be mindful of your own portfolio and discover how insurance can help you to mitigate risk.
Stay tuned folks, I will be posting the Life Insurance Guide shortly!If you would like to read more articles like this, you can sign up for my free newsletter service below (we will not spam you).