Has a group life insurance policy through work worth $150,000, plus disability insurance.
Kat says: Harry,
the most immediate problem I see is your lack of renter's insurance. If
you went home tonight and found a fire raging in your apartment
building, you might not be able to recover from the loss of all your
possessions. Renter's insurance is cheap and you can get a "multiline"
discount by buying it from the same company that sells your car
insurance. I'd urge you to call tomorrow and get that coverage. Your
agent can help you determine the coverage level you need.
If you have some expensive computer equipment or
other valuables worth more than $1,500, make sure to get a special
rider for those so it's all sufficiently covered.
On the other hand, you've done a good job insuring
your car. I agree with your decision not to carry comprehensive
insurance — it's not worth it on a 1998 Integra. You may want to
consider also dropping your collision coverage; look at your premiums
for that and see if the potential payout is worth it. If you totaled
your car, you'd receive an insurance check of about $3,500 for it,
according to a value estimate from the NADA Guides.
Michelle says: You're lucky to be covered by both group health and disability insurance through your workplace.
If you're happy with what you're paying for group health, I wouldn't change anything here.
But I would find out the details of your current
group disability policy. Does it provide short-term disability payments
or only long-term disability? Find out the "elimination" period, which
is the time you have to wait to receive payments after becoming
disabled. If it's a long period, look into a short-term disability
policy — odds are you're more likely to need a short-term policy over a
long-term, and it's good to have both.
Amy says: Harry,
after renter's insurance, the next important step would be better life
insurance. You do have $150,000 through a group life policy, but that's
probably not sufficient to support your young son if you pass away, and
you can't take a group life insurance policy with you if you lose or
leave your job. Now's the perfect time to lock in a good rate. If your
financial goal is to provide coverage through your son's college years,
a 15-year term life insurance policy would fit the bill.
According to our Life Insurance Needs Estimator Tool,
you should have about $580,000 in life insurance. I'd recommend you
seek out some online term life insurance quotes to see what level of
coverage you can afford. If you can't afford a $500,000 term life
policy, consider buying what you can afford and then supplementing with
your group life policy at work.
Make sure your son isn't named as the beneficiary
on your policies; he can't receive life insurance money until he's 18
years old. Instead, set up a trust that can receive the money on his
behalf.
Amy says: Harry,
you mentioned that you're wondering what kind of life insurance price
you can get as an ex-smoker. Here's where it will really pay off to
shop around online from multiple insurers. According to the Society of
Actuaries, some life insurers will give you a nonsmoker rate after one
year of quitting; other companies will require a longer period. No
matter what period is required, if the life insurance application blood
test finds nicotine in your system, you'll be charged a smoker's rate.
|
Makeover at a glance
|
| In the car: Car insurance limits of 100/300/50 with collision coverage |
Same liability limits; investigate premium savings from dropping collision |
| At home: No insurance |
Renters insurance with a rider for anything of significant value |
| At work: Group health insurance and disability insurance |
Find
out the "elimination" (waiting) period on your disability coverage; if
it's a long period, look into short-term disability coverage |
| For your family: Small group life insurance policy |
Get
quotes for a $500,000 term life policy of 15 years or longer, depending
on how long you wish to provide for your son. If you can't afford that
much, buy as much term life as you can afford and then supplement with
your group life insurance from work. |
This insurance makeover contains general
statements of insurance principles and should not be used as a
substitute for professional advice from a licensed insurance agent.
