Landmark Credit Union

Landmark Credit Union

Review Insurance to Ensure Proper Coverage

by Maureen Flietner / September 8th, 2020

Insurance coverage can ease financial hardship when life gets complicated, unpredictable, and expensive. For that reason, you should review and adjust your coverage regularly. But when and why to review? Here are a few suggestions.

Life stages can be triggers

If you're a young person just starting out, look at renters and perhaps auto insurance. Also consider buying disability insurance. According to the Social Security Administration, about 25% of today’s 20-year-olds will become disabled due to a medical condition before they reach their 67th birthday. If you're not covered under your parents' health policy or at work, think about catastrophic health insurance. 

If you're getting married, adjust auto, homeowners, and health insurance coverage to protect you and your spouse. Bundle auto and home insurance for a better rate. If you're expecting or have children, enroll in family health coverage. Think about life and disability policies in case tragedy should strike. 

If you're setting up a household with a domestic partner, know that insurance needs can be different from those of married couples. If you share a car, for example, you need to make sure one partner is the primary driver and the other is listed as the secondary driver on the policy. Review coverage under home ownership and for personal belongings. Look for auto discounts available for domestic partnerships. Contact your state's insurance department to find out more about laws in your state.

If you make major purchases or remodel your home, review coverage. You might want to cover items like expensive jewelry or electronics with riders—add-ons to your policy. Home additions also need a policy adjustment. If you install a security system, you may qualify for a premium discount. If flash floods, mudslides, or wildfires are possible in your area, check what additional coverage you might want to add to your policy. Don’t wait until you need to file a claim to examine your risks.

If you're separated or recently divorced, check for coverage gaps and ways to cut costs. If your soon-to-be ex-spouse is paying the insurance bills, give the insurance company your contact information so you can be notified if your spouse fails to pay the premiums.  When the divorce is final, remove a former spouse from your auto policy to protect yourself from possible liability if he or she is involved in an accident and is sued. Multicar discounts often no longer apply. Consider life insurance as part of the final divorce decree to cover financial obligations. If the spouse providing alimony and child support dies, this may mean a loss of income. Consider life insurance on the spouse raising the children because, if he or she dies, you will need to finance costly childcare. If purchasing life insurance to provide financial protection, consider term coverage rather than whole life. Term is generally cheaper and designed to provide protection for a specific time, for example, until the children reach age 21.

If you enter military service, review your insurance regularly. Deployments and frequent moves complicate coverage. Service members may want to include Servicemembers' Group Life Insurance in their comprehensive coverage. Talk with a military insurance specialist for more details. 

When you retire or become a senior, check for homeowners policy discounts. Compare auto policies—premiums may rise for seniors. You may also want to look into buying annuities to help you fund your retirement.

When the premium notice arrives, use it as a reminder to shop around. Comparisons are easy to obtain online. If you don't understand your policy, review it. According to the National Association of Insurance Commissioners (NAIC), most Americans failed to correctly answer basic questions about insurance coverage, including:

1.    Does auto insurance cover personal property stolen from your car?
2.    At what age do most people become eligible for Medicare?
3.    Can credit scores affect your auto insurance premium?

To learn more about various kinds of insurance, go to the Consumers resource page on the NAIC’s webpage.


NCUA Equal Housing Lender
Printed Thursday, November 26, 2020

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