Below are several suggestions for Maria and Joseph to keep in mind as the future unfolds:
Homeowners Insurance: This is currently a part of their mortgage payment, but that should not stop them from comparison shopping from either their State Corporations Commission or an Independent Insurance Agent. They should find out how many companies provide homeowners insurance in their area and pay special attention to any that are mutual companies, as their pricing is frequently beneficial. They should be sure to compare policies with identical benefits, and that the insurance amount is adequate to rebuild their home in case of a catastrophic event.
Automobile Insurance: In many areas of the country, the variance in automobile policies is an amazing 300 percent, so it pays to shop for insurance on a regular basis. Also, they should be sure to have Joseph’s car covered with a business use addendum.
Liability Insurance: There are two forms of this insurance to be concerned with. First, would be a general liability policy for Joseph’s business. Second, would be an umbrella policy for the family. Although they may seem to be insuring the same issue twice, it is important to note that business coverage needs to be separated from a general policy for the family, the same as for the automobile policy referenced above.
Life Insurance: Maria now has employer-paid life insurance and Joseph has a personal policy. They should be sure to keep those in place until retirement as a premature death in the meantime would destroy the assumptions used for projections in this report. They may also want to consider consulting with a insurance specialist to ascertain what level of insurance would be necessary in a survivor situation to ensure that their coverage is adequate.
Disability Income Insurance: It is not apparent whether Joseph carries this insurance. If not, it would be most advisable to obtain it. Maria is likely to have disability insurance as part of the benefits package with her new job, so she should read her human resources manual to determine both the coverage amount and duration of coverage.2 If it appears weak, there are individual policies available for a small portion of income and a Social Benefits Rider which provides underlying coverage for the majority of income.
Health Insurance: This was a large expense during unemployment as Maria’s work coverage covered all three family members. Although we don’t know the employee contribution of the new coverage, it is estimated that $450 per month is the average for comprehensive employer coverage for a family. Under the new laws, this will provide protection for the family until Isabella is 26. When Joseph turns 65, they will need to do a quick analysis of moving him entirely to Medicare and keeping the employer’s coverage only on Maria and Isabella vs. maintaining the entire family on one policy.
2 This was based upon her previous benefits package. We were unable to confirm.