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Recipe for Insurance: Life, Health, and Long Term Disability

Last week we wrote about employer sponsored retirement plans and what to consider as you head into open enrollment.  I asked you to think about this in terms of “mise en place” before making a complicated recipe – you want to do the research and analysis ahead of going into open enrollment, so you don’t rush the decision and end up with a half-baked cake or, in this case, potentially losing out of the benefits offered to you. 

The second part of this series is to review your insurances – life, health and disability offered by your employer.  Again, I suggest a measured approach in making these decisions. This is not a pinch of salt here, a sprinkle of sugar there, these decisions need to be thought about and analyzed in advance of the deadline for open enrollment. 

Life Insurance

It’s important to first review how much life insurance coverage you and your family need. There are quite a few variables that go into this equation:

  • What is your health? 
  • What expenses do you need to cover?
  • Do you need to consider extra expenses like childcare and college? 
  • How much do you have saved?
  • Is there another source of income for your family?

If you’re not certain about how to go about analyzing your health insurance needs, please reach out to your wealth advisor to assist you with the analysis.

After you determine what your life insurance need is, then consider the best way to cover that need. Time to pull out the secret ingredient  – your employer plan may not be the best option for you. Depending on your age and health status, you may be able to purchase life insurance outside of your employer at a reduced rate and it’s portable whether you continue to work with your employer or not. If you have health issues that prevent you from obtaining life insurance on the open market OR your employer covers the cost of insurance, your employer-based plan may be your best option to cover your insurance needs. 

Health insurance

 Plans and coverage can change, premiums may increase, and your specific needs may change. Depending on your health, prescriptions, and family situation, you may look at if changing plans makes sense for your situation. Take into account out monthly premiums, deductibles and out of pocket maximums when considering what health insurance to cover. 

Long term disability insurance

While may employees consider covering their income in case of an untimely death, many don’t consider what would happen if they became disabled and can’t work. Most employers will offer disability insurance to cover about 60% of wages. Some employers let you choose if you want to pay for your benefits with post or pretax dollars. If you choose to pay on a pre-tax basis, your benefits will be taxed when you receive them. If you pay on a post-tax basis, the benefits you receive will be income tax-free when you receive them. Again, time to crunch some number to determine which path to choose – to pay for the benefit with pre or post tax dollar and to determine if what your employer offers is enough to cover your   needs. 

The next and last blog on open enrollment will cover additional offerings – pet insurance, legal services, HSAs and FSAs. 

Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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