A part of working on our debt free life is to have the proper coverage. Insurance coverage that is. You don’t want to have to dish out big lump sums because you decided not to get insurance, for whatever reason it may be. Below is a list of 7 types of insurance Dave Ramsey recommends:
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Homeowner’s/Renter’s Insurance
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Auto Insurance
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Health Insurance
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Disability Insurance
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Long-Term Care Insurance
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Identity Theft Protection
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Life Insurance
Personally I don’t have all 7 and I need to fix that, but for now we have Homeowner’s, Auto, Health and Disability insurance. I know whenever people mention disability insurance, especially when we are younger, they tend to prefer saving the money for something else. I think this is a big no-no because you never know what will happen. Our situation is proof of that.
My husband, who’s 33, is a nurse and hurt himself pretty badly last summer when he was helping a patient. His shoulder is completely shot; it’s worse than torn ligaments, and even rehabilitation couldn’t fix the problem, so he will need surgery.
Since last July (it’s been 1 year already) he was working a mere 20 hours a week during the time they evaluated his shoulder. The doctor and his work have been playing yo-yo with him. Work, don’t work, work, don’t work… egh!! It’s been so stressful money-wise. Luckily we were able to get some disability for the few months he was off, but then we recently received a letter from the bank that his employer filled out the paperwork wrong and we owe them over 3k!
He’s been on the waiting list for his surgery since May, apparently it’s a 3-6 month wait, and we haven’t gotten any news yet. I’m looking forward to the surgery because it means he will be on work disability for about 4 months, and then he can go back to work (at full salary!!!).
In stressful situations, you don’t want to have to worry about money on top of everything (well, if your paperwork is filled out correctly… sigh), so I’m happy we got disability insurance for the mortgage and his car. Sure my husband may never have been hurt, and we could have been paying disability for the longest time and never taken advantage, but life has its ups and downs, you can’t predict what will happen. I’m a true believer in “better safe than sorry” and our situation simply proves that.
How many of these 7 types of insurance do you have? Do you plan on getting any of the types of insurance you don’t have?
on a side note : I have no background in finance whatsoever and everything I am blogging about is from personal experience and my determination to help others live a debt-free life.
Mrs. Sunglasses’ Dave Ramsey Budget Plan part 2 of 5
1. Getting Out of Debt with Dave Ramsey by Mrs. Sunglasses2. Having Proper Insurance Coverage by Mrs. Sunglasses
3. Learn to Negotiate by Mrs. Sunglasses
4. Getting Rid of Bank Fees by Mrs. Sunglasses
5. Couponing by Mrs. Sunglasses
blogger / wonderful cherry / 21628 posts
We have 1,2,3,&7. I have never even thought about disability insurance.
honeydew / 7504 posts
We have homeowners, auto, life, disability, and health insurance. I have an insurance of some sort through the credit card company, but don’t honestly know too much about it. We also have a separate insurance policy on my engagement ring and our wedding bands. The life insurance policies we have through work are terrible (mine only provides up to a max of $150K), so we want to find a much better plan for the 2 of us before Baby arrives.
I also definitely plan to look into long-term care insurance. As a hospital social worker, I can tell you that our patients with long-term care insurance have MUCH better coverage for nursing home and/or in-home 24-hour care than our patients who strictly have Medicare. It’s definitely an additional policy worth considering!
GOLD / wonderful olive / 19030 posts
We have 1, 2, 3, 4, & 7. I’m not even sure what 5 is and didn’t know 6 was an option.
pineapple / 12053 posts
we have 1, 2 and 3. we definitely need to look into life though and disability for me since i’m a wedding photographer and getting injured would be really bad.
admin / watermelon / 14210 posts
our accountant told us to get 4 and 5 but we haven’t yet. I should look into that and 6!
guest
Since I work in the insurance business…..it’s not only important that you have each of these but that you understand your coverage limits and how much risk you are retaining yourself.
Just one example – Some people are ok retaining more risk or carrying higher deductibles because they have the money on hand if anything happens. If your savings could use some work, a higher premium with lower deductibles is probably a better option for you.
coconut / 8430 posts
what exactly is the identity theft protection (#6)? is that like the LifeLock service?
coffee bean / 48 posts
I was going to be a good little young professional and get disability insurance, but then I researched it and discovered that my lovely state of California is already taking money out of my paycheck for state-funded disability insurance. I believe my husband is automatically signed up for some sort of life insurance through his company, but i never bothered to pay close attention. And I never even thought about long-term care. eek. Time to start getting serious and figuring this stuff out.
GOLD / pomelo / 5167 posts
@sunny: I’m no pro in the subject, so here’s a link from the Dave Ramsey site. Maybe it will be easier to understand then my attempt to explain it.
http://www.daveramsey.com/article/identity-theft-the-silent-crime-that-can-devastate-your-life/lifeandmoney_insurance/
pomegranate / 3329 posts
We have 1,2,3,6,7. We need to look into getting 5, it’s been a life saver for my Grandma.
You also need to check and see if Identity Fraud is included in your homeowners policy. I work in the industry, and the company I’m with includes up to $20,000 in coverage on all homeowners policies.
apricot / 370 posts
everything but #6, and never really thought too much about it, I think it’s a really good idea, with so many things online, this isn’t a bad service. thank you @mrssunglasses for posting the link.
health, auto and homeowners insurance makes sense in general, and now with a kid and another one on the way, long term care and life insurance make additional sense.
all this insurance does certainly add up, but i have to say, i do feel a big sense of relief that if anything happens, our family will be taken care of.
as for long term care insurance, this is definitely long term planning, and might never materialize, but seeing the HUGE monthly payments being made for my father’s care, made me realize how important this would be, so i would have care if i needed it, and it wouldn’t be depleting savings or saddling my children with the burden.
grapefruit / 4649 posts
We have 1, 2, 3, and 7, we have disability on my husband but not me right now (can you get it if you are a sahm? I am not yet but curious.) I really am not familiar with 5 or 6 which is unfortunate, I know my husband is really good about opting in to extra coverage (except for on my cell phone apparently
)so I wonder if we have the identity theft insurance through our homeowners…
Thanks for this! I really like posts that facilitate a conversation with my husband!
wonderful pear / 26210 posts
I had no idea there was identity theft insurance, learn something new everyday. I actually had my identity stolen twice, it’s not fun, but I wouldn’t ever get the insurance, to be honest. I monitor the reporting agencies on my own now, which is a lot easier now that they provide free reports.
cherry / 133 posts
I love Dave Ramsey! He is a major influence in our family. We luckily took FPU as newlyweds and got on track with our finances. We have everything but disability and LTC. We need to get the disability for us. And LTC for my parents!
blogger / pineapple / 12381 posts
As a physician, disability insurance is crucial, so that was my first “extra” insurance… but we also recently added on more life insurance.
hostess / wonderful apple seed / 16729 posts
I have 1-5. I think I have 3-5 (maybe 7) through work.
guest
What a Blog this is. I don’t have none of them but after reading this i want to know more about having proper Insurance coverage.And i suggest others to having proper Insurance Coverages.
honeydew / 7968 posts
i have 1,2,3. my husband needs to get 4. i don’t think it makes sense for me to get it since i am not working, thus not getting paid any money. i believe for #4, they pay like 60% of your salary and .6*0=0. =)
i wonder if you need #6 if you don’t really have to pay anything to ccs if you get weird charges.
i would like to get #7, but my husband feels he makes enough that he doesn’t need me to get it, but he has it so our family can be taken care of if something happens to him.