Do you have a Gap? ...in your insurance coverage

Do you have a Gap?

My question has nothing to do with your teeth, I am not a dentist.  It actually is about the coverage gaps in your insurance...which may be just about as equally exciting to you as a root canal.  Like it or not insurance of all types are required for a well-balanced financial plan of protection: home, auto, life, disability, business, dental...you get the point.

Insurance can cover a wide variety of activities and professions.  For example, Germany who just won the 2014 World Cup, has an insurable estimated value as a soccer team of over $1.01 Billion (Lloyds of London).       

Common Gaps 

Jokes aside, insurance is the foundation of your financial plan and protecting your family.  It serves as protection for your income, wealth, business continuity and estate plans.

Here are some important gaps to consider closing:

No life insurance beyond your basic group coverage.

Basic life plans offered thru work are usually 1x or 2x your salary.  You probably need close to 8-10x your salary in life insurance.

Not enough protection on your earnings.

If you are disabled and unable to work, your finances could suffer quickly.  Group Long Term Disability offerings thru work are usually only 50-60% of your salary and that benefit is then taxed, leaving you with a large income gap.

Not updating your Homeowners regularly.

Enjoying the recent home renovation or addition?  Your actual home replacement cost if damaged just increased.

No coverage on your valuables.  You can easily add jewelry, collectibles, furs, artwork and others as what are called "inland marine endorsements." This will provide the right amount of coverage whether destroyed, misplaced (lost) or stolen.

No Umbrella policy.

This is personal catastrophic liability coverage that protects you above and beyond your basic home and auto policies.  It is relatively cheap ($150 to $200/year) to add to your current policies.

No proper plans in place at your business.

Is there enough money for your business to cover overhead expenses if something happens to you?  What if your business partner passes or becomes disabled?  Drafting sensible business continuity insurance is a necessary protection for your business' value, your employees and your estate.

Addressing insurance gaps is an essential part of any good, comprehensive financial plan.  They need to be identified, reviewed and updated regularly.  Contact your property and casualty agent for the home and auto items (I am sure they will thank me for these thoughts...).  I will be able to assist with the rest.

As always, I am here for any questions.

To Your Financial Planning,

Luke A. Fields, CFP®

About Stewardship Cents  Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at:luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC