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if you need more coverage you'll probably need to buy a personal liability or so-called “umbrella” policy. This policy acts like an umbrella, extending over your existing coverage and paying in once your auto or homeowner’s coverage is exhausted. Weston says umbrella policies are one of the best-kept secrets in the insurance world. They’re relatively inexpensive so insurance agents make minimal commission selling them. But for $150 to $300 a year, depending on where you live, you can get $1 million of coverage—and peace of mind.
3 . Disability insurance
Disability insurance is designed to replace your income if you’re unable to work. Some people may consider their home or their 401(k) retirement account as their greatest asset, but it’s actually their ability to earn money. And it’s likely that most people today don’t have sufficient protection if they’re hurt or get sick and aren’t able to work for several weeks.
Weston says state workers compensation funds typically only provide benefits if you get hurt on the job. Your employer probably provides some kind of short-term disability coverage, but the checks will stop usually after three months to a year. If you still aren’t able to work after that, Social Security may provide some benefits, but only if you’re so disabled that you can’t hold any job.
Long-term disability policies make a lot of sense, but they’re also expensive. For example, a 35-year old worker in perfect health looking for a $5,000 monthly benefit would pay $2,500 a year or more for an individual policy. It’s easier to get a policy through your employer, if that’s an option. U.S. Department of Labor statistics show that roughly 25% of U.S. workers have long-term disability coverage through their jobs. Either their company pays for the insurance, or the worker can buy it at reasonable group rates. The larger the company, the more likely it is to provide this coverage.
Maintaining Appropriate Levels of Health Insurance
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