These are merely minimal suggestions for insurance portfolios during an individuals life-time. Each person is unique and needs to customize their portfolio based on a careful examination of their goals and current financial condition.
Suggested Insurance Portfolios When you are not sure what insurance you need.
Caveat The portfolios you are about to read are only suggestions. Each person’s insurance portfolio should be built with a careful examination of the individuals future goals and current financial situation.
Term Life InsuranceTerm Life insurance pays a cash benefit whenthe insured dies. Since it has no cash value orsavings elements, it is currently veryinexpensive.
Disability InsuranceAlso known as Disability Income insurance, this typeof insurance will pay a stated benefit while an individualis unable to earn an income because of injury or illness.Through-out this slide show, I recommend a 6 monthbenefit period as a minimum. That is because SocialSecurity pays no benefits at all until an individual hasbeen disabled for at least 6 months. Roughly 60% ofSocial Security Disability applications are denied. In lightof that, if you can afford the premium, I wouldrecommend that you get a benefit period longer than 6months.
Major Medical Health InsuranceThis type of insurance is what the politiciansrefer to as “Health Insurance.” It pays most ofyour medical bills when you are sick or injured.It is the most comprehensive of all insuranceplans. It is also the most complex of allinsurance plans. In order to avoid surprises, makecertain that you have read and understand whatyour policy will and will not cover.
Young Single • Term Life Insurance = 1 x annual salary or minimum face amount allowed by your insurance company. • Disability Insurance = minimum 60% of monthly salary for 6 months. • Major Medical Insurance = High Deductible Health Plan
Newlyweds • Life Insurance = 3 x annual salary • Disability Income = 60% of monthly income • High Deductible Major Medical
Family With Juveniles • Term Life Insurance (Wage Earner) = 20 x annual income • Term Life Insurance (Homemaker) = enough to pay for final expenses & hire nanny until youngest child is able to be self-sufficient. • Term Life Insurance (Children) = $10,000 Child Term Rider a.k.a. CTR
Family With Juveniles (continued) • Disability Income (on wage earner only) = 6 month benefit @ 60% of monthly income at a minimum. • Major Medical with a doctor’s office co-pay benefit. • Critical Illness = Major Medical “Out of Pocket” level plus deductible at a minimum insurance if a parent had a parent or sibling with cancer, heart attack or stroke.
Long Term Care InsuranceOften abbreviated as LTCI, this type of insurancepays the expenses associated with a Home HealthAide, Assisted Living, Adult Day-Care or NursingHome when the insured is unable to perform 2 ofthe standard 6 Activities of Daily Living withoutassistance or “stand-by” assistance. The othercondition that triggers benefits is when there isevidence of “cognitive impairment” that wouldmake the insured a danger to himself or others.
Empty Nesters (Age 50-59) • Term Life Insurance = Lower to number of years to replace 60% of income until the surviving spouse can qualify for Social Security. • Disability Insurance = 60% of monthly income for at least 6 months. • Long Term Care Insurance = At a minimum get enough to pay for you to hire a home health aide today along with an inflation rider. • Major Medical Insurance = High Deductible Health Plan
Empty Nesters Age 60-64 • Replace Life Insurance with Long Term Care Insurance. • Disability Insurance = 60% of monthly income for 6 months until you are eligible for Social Security Retirement benefits. • Major Medical Insurance = High Deductible Health Plan. • Critical Illness = Your Major Medical plan’s maximum “Out-of-Pocket” expenses at a minimum.
Retiree (Age 65) • Medicare A • Medicare B • Medicare D (Prescription Drug Plan) • Medigap or • Medicare Advantage