You can’t take it with you

Two things are guaranteed in this life: you’ll pay taxes and someday you’re going to die.

Thats the reality of the true common nature that we all share. There will most definitely be an end.

What’s different about all of our stories is our journey and what actions you’ll take to protect your loved ones, once you’re gone.

You are reading this blog, because you’re on the path to financial independence and the creation of generational wealth. Financial independence is for your benefit during your lifetime. Generational wealth is the benefit you provide to those who follow after you’re gone.

You worked hard for that privilege to provide for others, so it is only right to protect it. To gain financial independence and create generational wealth you’ll need to invest in yourself. One of those investments is insurance.

Today we are going to do a brief review of the 5 types of insurance you absolutely need and in our opinion the priority in which you need them.

1A. Health Insurance

This goes without saying, but if you are not healthy it is difficult to work and earn an income. You need multiple sources of income to reach financial independence thus Our health is paramount to successfully obtaining that goal.

According to the data from the 2017 census bureau, African-Americans form approximately 13% of the population in the United States (U.S.). Of that 13%, a little over half of us (55.5%) have private health insurance, 43.9% of us utilize government subsidized health insurance, and approximately 10% of us are not Insured. To make matters worse, we have higher rates of heart disease, diabetes, HIV/AIDs, asthma, cancer, strokes, and food deserts that corresponds to the locations of our neighborhood. Some of those diseases also are the culprits for an increased death rate in our communities. This is not acceptable.

The wrong disease or accident could set your family back generations. The U.S. health insurance system is by no means perfect, but it’s all we have. SO WE NEED HEALTH INSURANCE.

1B. Life Insurance

African-Americans in the U.S. have longed viewed life insurance as a means to provide generational wealth. This is great, but not all life insurance is created equal. In addition, you have to be weary of some agents who peddle products in inner-city neighborhoods which might not be aware of the pitfalls of that product nor the commissions based business to which that agent relies.

You absolutely need the right amount of life insurance based upon your financial picture. Too little coverage and you risk causing financial harm to those entrusted to handle your affairs after you pass. Too much coverage reflected in high premiums will set you back in trying to achieve financial independence during your life time. You have to find the right balance. t In addition there is the consideration of what insurance product to purchase: Whole vs Term?

2.Renters/Homeowners Insurance

Renters/Personal Property Insurance

34% of the United States housing market is comprised of those who rent, but only 1/3 of those folks purchase renters insurance. As more folks choose to rent secondary to increases in home prices across the country, renters insurance becomes more important. Landlords may require you to have renters and insurance as a stipulation under your lease. However some landlords don’t. Your possessions, which you spent your hard earned money and have emotional ties to are not covered under your landlord’s insurance policy. That responsibility lies with you, so why not protect yourself?

A common complaint is that renters insurance is expensive. That used to be the case however there are newer companies like Lemonade which aim to decrease the cost of renters insurance by using flat fees or you can shop around and search for competitive rates. Remember, you have options and there is always someone who can do it for cheaper.

Homeowners Insurance

Most folks will carry home insurance as a requirement of having a mortgage. The loan to which they provide you (mortgage) is secured by your house. So it makes sense for the bank to require you to protect their investment. We won’t touch on this here because…you don’t have a choice if you choose to own a home and have a mortgage. However, when your mortgage is paid off, so don’t forget to protect your asset (home).

3. Disability Insurance

If you are injured on the job or laid off unexpectedly, how will you afford your expenses? If your answer is utilize your emergency savings fund, then awesome!! However you may not need to use it if you have disability insurance.

There are two types of disability insurance: short-term and long-term. Most policies are not designed to cover 100% of your income however this is an option (albeit an expensive one) especially for those are in high income professions (Doctor, Lawyer, etc). The type of coverage you receive is further defined as “own occupation” or “any occupation”.

“Own occupation” provides income coverage once it is determined that you are disabled and can no longer work in your chosen field. This is the surgeon who has a traumatic hand amputation and can no longer hold a scalpel. “Any occupation” covers a disability which affects your ability to perform any job. The stricter the definition, the more difficult the policy is to obtain, and the more expensive it is.

Employers will typically offer a small limited degree of disability insurance, however the amount of coverage provided may not be suitable for your financial situation. If you are in a high risk, high reward profession, please obtain disability insurance to protect you and your family should the need arise and you are unable to work.

4. Umbrella Insurance

I have to admit, I had no clue what umbrella insurance was until a couple of years ago. My wife and I were meeting with a financial planner who looked at our entire financial picture and pointed out we were taking a huge risk by not having this insurance policy.

Umbrella insurance is a type of personal liability insurance policy which is designed to cover the excess liability not covered under your homeowners or auto insurance policy.

Here are example on how an umbrella policy works:

You are the cause of an auto accident however your auto insurance policy is unable to cover the full amount of the damages and medical expenses for the other party.
A neighbor is injured on your property while playing on a trampoline/swimming pool that is not fenced in.
Your dog bites a stranger while out on a walk and the person decides to sue you.

An umbrella policy can save you lots of hassle, headache, and stress while also protecting your hard earned income. This type of insurance policy is not well advertised however is very affordable because it is often bundled with your other insurance policies. Make sure to ask your insurance company if they provide these policies and make sure you are protected.

As always if you have questions or concerns regarding creating an emergency fund, investing, real estate, insurance, or planning for the future, don’t be afraid to speak with qualified financial advisor. Smart Asset has a great tool to find an advisor in your area or feel free to email me (contact@surgifi.com) to help you on your path to financial independence.