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Budgeting Step Seven: Insurance and Living Wills
We are really making progress in this series on budgeting! Step seven is a crash course in insurance and living wills. Let’s face it–if we’re going to talk about life, we have to talk about death as well. It is necessary for us to plan for life’s unexpected events, and since we all know that death is inevitable, we need to plan for it as well–even if it makes us feel uncomfortable to talk about it!
If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever. (1 Timothy 5:8)
Insurance
Be sure to do your homework before choosing an insurance company. There are some really great rates out there with good coverage, and you don’t want to miss out. Ask around. If you have friends that recently filed a claim, find out what kind of service they received. You want a company that is thorough, efficient, and easy to deal with. Remember, when you file a claim, it is because a stressful event has happened in your life–illness, accident, fire, theft, death, or another type of loss. The people you deal with can make a big difference in alleviating or adding to your stress.
The 5 Main Types of Insurance Coverage
There are 5 main types of insurance coverage you should consider:
- Health Insurance
- Life Insurance – for you and your spouse
- Disability Insurance (Short and Long Term Care)
- Auto Insurance
- Homeowners or Renters Insurance
The two best tips I can share with you that helped me when deciding insurance information.
- Check out Zander Insurance – We used them to get our term life insurance. They are like a clearing house for insurance companies and they find great rates, even for those with pre-existing conditions. Remember, you want about 10 times your income in coverage and you want one for each spouse. If your income is around $60K per year, you want to look at about a $600,000 insurance policy. Their number is 1-800-356-4282. You can go here to get an online quote comparison.
- Go with a Higher Deductible – With any type of insurance coverage you get, try to go for the higher deductible. In the long run, you save a lot more money. By the time you pay the higher deductible (if you do), you are usually better off than the monthly or quarterly premiums.
“For what is your life? It is even a vapor that appears for a little time and then vanishes away.” (James 4:14)
Living Wills
My husband and I looked into getting our Living Wills done after our first child was born. It has been a great source of peace to know that we have everything in place for our children’s care and safekeeping in the event that something were to happen to us.
Some of the things that we decided in ours were:
1. DNR – DNR stands for Do Not Resuscitate. A request for DNR orders is something you need to know about. You should know what your spouses wishes in the event that he/she were in an accident or if he/she becomes ill and needs to be put on life support. In short, a DNR request means that the person requests not to be resuscitated via CPR methods or life support should they stop breathing or encounter heart failre.
2. Guardians – If something happens to you and your spouse, who will step in and care for your children? Have you ever thought about the person or couple you would want to raise your children, and how you would want them to be raised if you weren’t around? These are very important things to think about, and I’ll warn you–not a light subject to discuss.
3. Trustee and allocation of assets – We had to determine who would be in charge of our estate and how the money would be allocated to our children if we were to die. We were given some great advice to split it up into 3 payments. If something were to happen to us, our plan calls for our children to get 1/3 upon their high school graduation, 1/3 at age 25, and 1/3 at age 30. Our decision behind that was that as they age, they will grow wiser. (Hopefully, that would be the case!)
ACTION STEP: Check with your employer to see if they offer a Living Will service. To our great surprise, my husband’s company offered this service for free! They provided a list of lawyers we could choose from, and his company paid all the fees to have our wills written.
Can you believe how much you’ve accomplished so far? Let’s move on to Step Eight: Children and Money.
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