We know that the title of this episode might not strike up the butterflies in your stomach or get you excited about life. But really, we’re talking about insurance because it. is. critical. We think that insurance is the most overlooked, undervalued, and denied aspect of your financial health. And yeah, it’s crazy boring. But you know what? It could save your 🍑
[00:51] Why insurance is critical
[01:11] The situations that insurance make “manageable”
[02:39] The downsides of insurance salespeople — giving you the wrong kinds of insurance
[03:16] Why insurance isn’t a “one and done” thing
[04:25] The risks of assuming you don’t need insurance
[05:08] The arguments against insurance (and what we have to say about them)
[07:06] How insurance helps us meet our basic needs
[08:38] Why buying insurance can feel contradictory
[12:21] The key to matching your insurance needs to your current life + biz
[12:31] What insurance you need when your wealth is low
[13:36] What insurance you need when your wealth goes up
[15:44] Why you need to do a routine insurance audit as your income changes
The biggest myth we want to bust with today’s episode is the idea that “you don’t need insurance because you’re young and healthy,” or because “you’re careful.” Y’all. The whole point of insurance is to protect you if things happen unexpectedly. Nobody intentionally gets themselves sued, or in a major car accident, or (god forbid) terminally ill. But stuff happens. And insurance is here to help you when it does.
We also hear “Insurance is a waste of money. I’ll just save up for troubled times.” Saving has its place, and we agree that you should save for a rainy day. But are you gonna be able to save enough to cover lost income if you can’t work anymore? Or to cover your personal assets if someone sues your business? These aren’t scare tactics, you guys. We’ve seen it happen more frequently than we want.
And that leads us to our final objection against insurance: “Nobody is gonna sue my business. I have nothing to take.” Well, did you know that a business lawsuit could actually affect your personal assets? Yuuuup. Let’s say, for example, your business is sued for damages of some sort. If you can’t pay that from the business, guess what? You might have to pay those debts from your personal assets. This is why liability insurance for your business is SO important, and yet how many of you actually have it?
In this episode, we make it very clear that this isn’t our way of telling you that you need every insurance policy under the sun. Insurance is highly specific to your income, business, personal situation, health — all that. This is also why we think insurance isn’t a “one and done” thing. What you need today, for example, might not be what you need 10 years from now. And as an entrepreneur, it might not even be what you need 1 year from now, as your income and business have the potential to grow exponentially in a short time.
In the episode, we talk about a few of the types of insurance you might need based on your individual situation. These include overarching insurance policies that you might need as a budding entrepreneur, like health insurance, life insurance, and disability insurance. During this phase in your life, you’re taking more risks and have more at stake if something were to happen, so you’ll want to make sure you’re covered.
For those of you who are further along in your business, have some wealth built up, and could potentially weather some setbacks, you may need less insurance. Especially if you’re working toward your BULB status (25x your minimum annual income), you may not need as much disability insurance, for example. That’s because you’ll be able to pay for your lifestyle even if you can’t work. However, you may need more life insurance to help your family if you pass unexpectedly, or business insurance to help your partner keep the business afloat.
Of course, these are basic overviews on the type of insurance you may need (or not need). You’ll need to speak to a qualified insurance expert to hear which types of insurance are right for you.
A final note on buying insurance: make sure you’re working with professionals who have your best interests in mind. We’ve seen young people who’ve been sold whole life insurance policies that have insane premiums — something that doesn’t fit their needs and takes away money they could use to build wealth. We’ve also seen people who are underinsured based on their risk analysis.
Work with insurance agents who are experienced and can do a full risk analysis, and also connect with a CERTIFIED FINANCIAL PLANNER™ who can give you unbiased second opinion. It may seem unnecessary, or something you can do later… but things happen when you least expect them. Don’t wait until something bad happens to take a look at the insurance policies you could’ve used to help you.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual.
What if you had a clear formula to help you figure out how much to save… while paying down debt and enjoying life? It is possible… when you know your numbers.
Check the background of your financial professional on FINRA’s BrokerCheck.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Advisor Launchpad to provide information on a topic that may be of interest. Advisor Launchpad is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
Copyright 2019 Advisor Launchpad.
Securities offered through LPL Financial. Member FINRA & SIPC. Advisory services offered through GWM Advisors, dba Toujours Planning, a registered investment advisor. GWM Advisors and Toujours Planning are separate entities from LPL Financial.
The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: AL, AR, CA, CO, DE, DC, FL, GA, ID, IN, LA, MI, MS, MO, OK, TX, VA.