Each month, our health insurance premium is deducted from my wife’s paycheck.  Every year, I pay our annual renter’s insurance premium.  And, once every six months, I pay our automobile insurance premium.  The premium is the amount charged, by and insurance company, for actual coverage.  But, not only do we pay insurance premiums, we are also, in the event that we actually need to use the insurance, must pay a portion of the expense, not covered by the insurance company, called the deductible.

Renter’s Insurance -

We live in a house provided by my employer, as part of my compensation.  My employer carries coverage for any damage to the house itself, be we carry coverage for the contents of the house - our stuff.  We have had our current policy for more than ten years.  Our annual premium is less than $150.  Our deductible, for most events, is $1000.  I must say, for the price, our renter’s policy is a great deal.  I would strongly suggest to anyone who is renting an apartment or living in a house that they do not own, that you get a renter’s insurance policy.  Coverage will vary from policy to policy and company to company, so shop around and compare prices.  In most cases, the higher the deductible, the lower the premium.  One note - always keep enough money in your emergency fund to cover your deductible costs.

Health Insurance -

We have health insurance through my wife’s employer.  Our annual family deductible is $2000, with a per person deductible of $1000.  After we meet our deductible, our insurance company then pays 90% of our expenses.  Again, it is important to us to keep enough money in our emergency fund to cover and deductibles.  My wife just had our baby, so we’ve now met our annual family deductible.  By the way, when we arrived at the hospital to have the baby, we had to pay our portion, up front.  It was fun to see the look on the cashier’s face when I handed her a stack of hundreds.

Automobile Insurance -

Our automobile insurance covers our three, paid for automobiles.  We choose to pay for ‘full coverage’.  Our semi-annual premium is about $600.  For less than $100 a month, we are able to fully insure our automobiles.  I’ve been with my current insurance agent for more than 18 years.  I have no doubt that I could ’shop around’ and find a lower premium, but I know my agent by name and he answers the phone when I call.  My wife was in an accident several years ago, and within 15 minutes, our agent was taking care of our claim.  We raised our deductible to $1000 three years ago, and this reduced our premiums more than 15%.

How our deductibles affect the amount of money we keep in our emergency fund -

If you total our renter’s insurance, health insurance, and automobile insurance deductibles - $1000 + $2000 + $1000 - you get $4000.  For us, that’s our ‘rock bottom’ emergency fund amount.  If we maintain a minimum of $4000 in our emergency fund, at all times, then we can be confident that we can pay all of our deductibles.

By the way, as I type this post, I’m holding baby number three!  How cool is that?  New babies STILL rock!

• 3 Comments

I met with my lawyer today and gave him a copy of our current wills.  He’s going to review them and make any changes that might be necessary.  I had a friend help me write our original wills - a few years ago - using some software for creating your own will.  At that time, I had very few assets and I knew very, very little about personal finance and / or estate planning.  Now, I know (a little) more about personal finance and I want to shore up all of our end-of-life documents.

I have received, and am reviewing, several quotes for new term life insurance policies.  It will cost me a little more up front, but I am going to go ahead and get 30-year level term policies.  I am uninterested in whole life or universal insurance.  I will do my investing in my retirement accounts.  (By the way - if you have children and you want to have burial insurance - you can add a “rider” for them on your term life policy.  Contact your insurance agent for more information.)

My wife is still loving the new minivan.  I didn’t realize how stressed out I had been - worrying about what we were going to do about the old van, how much we could afford to pay, when we were going to buy something new, etc.  I guess you could say that this was the very first “major” test for the No Credit Needed “philosophy”.  I’m relieved that things went well, but I will confess that I don’t like seeing such a major drop in my savings account.  It’s time to really, really hammer down and pour some money back into my savings account.

• 9 Comments

I have contacted an independent insurance agent for Term Life and Longterm Disability Insurance Quotes.  I already have a term life policy (and so does my wife) but I want to up our coverage amounts.   We both make about the same amount of income, so I requested 6 quotes - 20 and 30 year policies at 3 different amounts - 3 quotes for her, 3 quotes for me.  The smaller amounts are equal to 10 times our current salaries - and the next two amounts are equal to 12 times and 15 times, respectively.  As for longterm disability quotes - we both have policies from our workplaces, but we are looking for some additional / replacement coverage.

(Quick side note - I may have found a newer min-van!  I’ll have more on that later…)

• 4 Comments

My wife and I have two children and another baby on the way.  We both have wills - but we are taking our wills to our lawyer Wednesday so that he can look them over and make any changes or improvements that might be necessary.  We will also be discussing other “end-of-life” documents that we might need.  After our meeting on Wednesday, I’ll fill you all in on what he thinks we need to do.

I have also begun to shop for more term life insurance.  With the new baby on the way, our baby-related expenses will be going up by 50%!  I want to be sure that my wife and kids will be taken care of - just in case something were to happen to me.

• 6 Comments

I just finished sending a payment to my automobile insurance company. As with most things related to “personal finance”, sending the payment got me to thinking about the blog. I realized that I’ve never written a post specifically about the types of insurance I have. So, here goes:

Health Insurance: My wife is an educator, so our entire family is covered under her insurance policy. United Health actually administers the plan and it’s a pretty good plan, considering the cost and the ease-of-use.

Dental Insurance: My wife and the kids are covered by her plan at work. I’m not covered. I just pay for a dental visit. The insurance costs more than I’d like, but it will payoff if one of the kids needs braces or other dental work.

Long-Term Disability Insurance: I have a long-term disability insurance policy that is attached to my 403b account. It provides a very modest amount of monthly income, should I become disabled for more than 90 days. My wife has a similar long-term disability policy. We do not have short-term disability insurance… we have an emergency fund!

Renters Insurance: My employer provides our housing. So, I have a renters insurance policy in place to cover our “stuff”. The policy is relatively inexpensive, considering the amount of the coverage.

Term-Life Insurance: I have two term-life policies. My wife has a single term-life policy. Together, our policies amount to about 20 times our combined income. My policies are actually a little smaller than hers. Why? I signed up for my policies when we were making less money. I will be increasing the amount of term-life insurance that we have at the end of 2007. I do not have a whole-life policy.

Automobile Insurance: All three of our automobiles are insured with the same company. In fact, I’ve been with the same automobile insurance company for more than 17 years! I’ve shopped around from time to time, but I like my broker and the rates are competitive. One change I have made: I now pay my insurance once every six months instead of once every month. I have “full-coverage” on all of my automobiles.

There you have it, a list of my various insurance policies. Have I missed anything? Any thoughts or ideas? Leave a comment…

• 13 Comments