When it comes to financial planning, insurance often sparks debate. Is it a tool for building wealth or simply a safeguard? The truth is clear: insurance is not designed to build wealth—it’s meant to protect it. Understanding this distinction is critical for making informed decisions about coverage.
Why Insurance Matters
Insurance acts as a financial shield against unexpected events—accidents, illnesses, property damage, or identity theft. Without it, a single incident could derail years of financial progress. While investments grow wealth, insurance ensures that growth isn’t wiped out by unforeseen costs.
Types of Insurance You Should Consider
1. Home Insurance
If you own a home, coverage is non-negotiable. It protects against disasters like fire, theft, or severe weather. Tip: Choose a deductible that balances affordability with premium savings, and ensure coverage is sufficient to rebuild your home.
2. Auto Insurance
Wisconsin law requires drivers to carry auto insurance. Comprehensive coverage is ideal for most people, offering protection against accidents, theft, and damage for both you and other drivers. Liability-only policies may work for those who can afford to replace their vehicle out-of-pocket, as protection is only for other drivers.
3. Umbrella Insurance
Umbrella policies provide extra liability protection beyond home and auto coverage. They’re especially valuable for individuals with significant assets or higher risk exposure. If you have kids or engage in activities that increase liability risk, this low-cost option is worth considering.
4. Life Insurance
Life insurance becomes essential if someone depends on your income. Less expensive term policies (10-, 15-, 20-, or 30-year) are generally recommended over expensive permanent options like whole or universal life. Pro Tip: Buy early—premiums rise with age.
5. Long-Term Care Insurance
As we age, the likelihood of needing long-term care increases. Coverage becomes more expensive over time, so planning ahead is key. Some states, like Washington, are introducing mandates for residents to carry coverage.
6. Identity Theft Insurance
Cybercrime is on the rise, with millions of identity theft claims filed annually. Coverage often includes dark-web monitoring and fraud alerts. Combine insurance with proactive measures like credit freezes and strong passwords.
Key Takeaways
- Insurance protects wealth, it doesn’t grow it.
- Review your coverage annually to ensure it aligns with your financial goals.
- Consider your life stage, dependents, and risk exposure when choosing policies.
- Use deductibles strategically to manage premiums without sacrificing protection.
Did You Know?
Your employer sponsors this financial wellness benefit from Francis. The benefit connects you with down-to-earth financial planners who educate and advise on any money matters…without the sales pitch. We are exclusively engaged by employers like yours and have no investment products to sell, so you can feel confident that you will always receive objective advice.
Your financial planner will help you set priorities and achieve your money goals, without judgment or financial jargon. Know that all discussions are kept strictly confidential. This service is offered as an employee benefit with no per-session co-pays, so you can meet with a financial planner as often as you wish. Services are paid by your retirement plan or your employer.
Connecting with a financial planner is easy! Here’s how:
- Visit FrancisWay.com > Services > Participant Portal
- Call (866) 232-6457
Download the free mobile app (Search for Francis LLC)
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