April is National Financial Literacy Month, and in that spirit, the team here at Wichert wants to make sure that you and your family understand the role insurance plays in your financial forecast.
Financial awareness extends far beyond how much money you have coming in and what you owe. Bringing together all of the different aspects of your financial health is critical for young families especially, so that you can make smart choices for your welfare.
But what does insurance have to do with your finances, besides being among that list of bills you have to pay?
In short, insurance plays an important role in your financial security and long-term stability. It protects your savings so that it isn’t wiped out in the event of an emergency. And when life throws you a curve ball, insurance provides peace of mind.
But let’s get into exactly how insurance supports your financial security.
Understanding Insurance Basics
You can think of insurance as a way to protect you and your family from the unexpected.
There aren’t many of us that can tuck away sufficient amounts of pennies to cover the cost of the most expensive rainy days, but we can afford to pay a little bit of money for the assurance that someone will help us out if something does go wrong. That’s your premium, or regular payment to an insurance company.
Different types of insurance cover different types of “somethings” that can go wrong. Depending on your circumstances, your family might need some or all of these different types of insurance:
- Health Insurance helps cover doctor’s visits, hospital stays, and medicine
- Life Insurance provides for your family if a parent dies, covering expenses like a mortgage, future college costs, or living expenses
- Auto Insurance helps cover auto repairs, medical bills, and other costs in the event of an accident
- Home or Renters Insurance protects your home and possessions from damage, such as fires, theft, or storms
- Disability Insurance replaces part of your income if you can no longer work because of illness or injury
How Much Insurance Do You Really Need?
Every family’s needs are different, which is why it’s a good idea to connect with a local, independent Wichert agent who will get to know you and your family and help you make wise choices about your insurance.
There are risks involved with being underinsured and overinsured. If you have too little coverage, you could be paying for a policy that doesn’t do you any good when an issue comes up. But if you have too much coverage, you could be paying needlessly for policies that don’t actually benefit you. That’s money taken right out of your pocket for no good reason.
Before you buy insurance, your agent can help you assess your needs and determine the right amount of coverage for your family’s budget. This balancing act is an important aspect of your partnership with a local agent. They have your best interest at heart and will help you balance affordability with necessary coverage.
Many families need more than one type of policy. Bundling different policies together can save you money—ask your insurance agent how you can save.
Prepare the Next Generation for Smart Financial Management
As your children grow closer to the age of financial independence, it’s always a good idea to begin including them in explanations of insurance so that they understand the value and role of insurance in protecting their assets and their family. If you need to file a claim, take the time to explain in basic terms what exactly is involved.
You can look for age appropriate and small ways to help your children begin to understand finances. The more they know and can begin to practice under your supervision, the better equipped and confident they will be once they reach adulthood.
What to Do Next This Financial Literacy Month
Here are three simple and basic steps you can take to make a difference for your family’s financial health this month:
- Review and update current insurance polices: Give your local, independent Wichert agent a call to make sure that your policies are up-to-date.
- Use online tools and financial planning resources for families: If you aren’t already tracking your monthly expenses, consider using a monthly budget calculator to help you see where your money is going. Knowledge is power!
- Seek professional advice if needed: None of us come pre-programmed as financial advisors, accountants, or economists, but there are some who have dedicated their careers to helping people manage their finances. Don’t be afraid to reach out for advice from a financial advisor or insurance agent if you need help understanding what’s going on. That’s what we’re here for!
This month is a great time to take the next small, smart step toward financial security and peace of mind. Contact Wichert for a quote or reach out to learn more about how our local, independent agents can support your financial goals and insurance needs.