Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we're discussing why you are probably under insured. Joel,
Speaker 1: the word on the street is that you don't have
Speaker 1: any insurance. So I'm not skating through life like that, man.
Speaker 1: And the other word on the street is that I
Speaker 1: have all the types of insurances. I'm over insured. Man,
Speaker 1: you're reading too much Reddit. All right, let's stay off it.
Speaker 1: Uh No, we are going to talk about insurance, but
Speaker 1: we're gonna talk about when you should have insurance, when
Speaker 1: you probably shouldn't have insurance. Uh And we're gonna talk
Speaker 1: about it in the form of the types of insurance
Speaker 1: that you should probably have. We're gonna talk about the
Speaker 1: types that you probably need to have, the types you
Speaker 1: don't need to have. And we are going to answer
Speaker 1: that question why most people probably are under insured. The
Speaker 1: answer is pretty short, but we'll make sure to cover
Speaker 1: that as well. Unless you think insurance is boring, will
Speaker 1: make insurance really fun this episode for the first time
Speaker 1: maybe ever. But Matt, before we get to that, you
Speaker 1: did something that was borderline frugal or cheap. I'm not
Speaker 1: sure where you landed in that and trying to tackle
Speaker 1: a repair to your rental property. Yeah, you're ready to
Speaker 1: hear my frugal win. I'm ready. It's totally a frugal
Speaker 1: win at this point. If it doesn't work out, then
Speaker 1: it's gonna end up biting me in the butt and
Speaker 1: it'll be considered a cheap move, cheap tail. Yeah. Well,
Speaker 1: at one of my properties in between tenants, one of
Speaker 1: the shelves in the refrigerator, right, you know, you get
Speaker 1: your glass shelves and they kind of canda lever and
Speaker 1: they're on the little brackets in this glass shelf. It broke.
Speaker 1: Totally sucked because I knew that meant I was gonna
Speaker 1: have to order a new part. Looked up that shelf.
Speaker 1: It cost something around a hundred and twenty bucks for
Speaker 1: a brand new glass like I don't know, Ken Moore
Speaker 1: refrigerator shelf, which seems like a little bit of overkill
Speaker 1: for a refrigerator shelf. Absolutely, And plus this refrigerator only
Speaker 1: has like two shelves left, so it needed to have
Speaker 1: another shelf in there. But then I had a wild idea,
Speaker 1: and I called up our local glass shop and I
Speaker 1: got a quote on a piece of glass that would
Speaker 1: fit in that shelf. That were the exact dimensions. Uh,
Speaker 1: and it was going to be less than thirty bucks,
Speaker 1: So of course I jumped on that. Man, we're talking
Speaker 1: a quarter of the price. I thought this was a
Speaker 1: great way to save some money. So if you happen
Speaker 1: to be in a position like this, maybe where you
Speaker 1: you know, busted out a shelf in your your refrigerator,
Speaker 1: look to a local glass company instead of ordering that
Speaker 1: part directly from the manufacturer. Some people would break a
Speaker 1: shelf and they'd be like, I need a refrigerator now. Well.
Speaker 1: I was really close to doing that because I wasn't
Speaker 1: even sure if this was a part that they still made,
Speaker 1: because this is an older refrigerator. And I thought, you
Speaker 1: know what, Okay, it's finally time to to get a
Speaker 1: new fridge. But then I thought, man, that fridge works
Speaker 1: really well still. It's it's old, but it still works.
Speaker 1: You know, we talked about refrigerators recently. How you got
Speaker 1: a new one. This is also the kind that's got
Speaker 1: the freezer over the fridge. But it's just a solid fridge.
Speaker 1: And I wasn't yet willing to to buy a floor
Speaker 1: model yet at the local best buy. But one thing
Speaker 1: I did want to mention that if you are going
Speaker 1: to order a piece of glass on your own, make
Speaker 1: sure that you get tempered glass, because that's the kind
Speaker 1: of glass that is used in a fridge, right. It's
Speaker 1: it's the special kind of glass that when it breaks,
Speaker 1: it like breaks into a million pieces. That way, there
Speaker 1: aren't like big sheets of glass that end up like,
Speaker 1: you know, slicing into your arm, that kind of thing. Uh,
Speaker 1: it's stronger, I think as well. I don't really know
Speaker 1: how tempered glass works, but so they have to special
Speaker 1: order it. It's not something that they can cut in
Speaker 1: person because that kind of defeats the whole purpose of
Speaker 1: it being tempered. I don't exactly know how temper glass works.
Speaker 1: I just know that they had to order, uh, that
Speaker 1: exact dimension, So make sure you get the exact dimensions
Speaker 1: they'll order it. It shows up, you slide it in there,
Speaker 1: and you're good to go. Man. Well, I love you
Speaker 1: ended up saving ninety bucks, and that fridge it's going
Speaker 1: to keep on going. I hope it continues working well
Speaker 1: for years and years for you, man. And it's just
Speaker 1: such a great idea to do whatever you can to
Speaker 1: extend the life cycle of the plants like that. Yeah,
Speaker 1: that's one of the things I hate is something that
Speaker 1: works pretty damn good except for like one little thing
Speaker 1: that you can't replace or that seems too expensive to replace,
Speaker 1: and then that thing gets hauled off to the landfill somewhere.
Speaker 1: So it's a good way to kind of keep some
Speaker 1: of these giant appliances from ending up in the dumps
Speaker 1: as well. Yeah, no doubt. All right, let's make in
Speaker 1: the beer that we're having on the show today. This
Speaker 1: one is called p B and J Sour by Shades Brewing,
Speaker 1: So it's a sour ale that tastes like a peanut
Speaker 1: butter and jelly sandwich. And we'll give our thoughts on
Speaker 1: this one at the end of the episode. Yeah, the
Speaker 1: huge things to Andy for donating this one to the show.
Speaker 1: But Joel, let's talk about insurance, buddy, let's do it.
Speaker 1: Let's get onto the subject at hand. We're talking about
Speaker 1: why our listeners, why a lot of them out there
Speaker 1: are probably underinsured, and Matt, the thing is a lot
Speaker 1: of them might not even know it. So in this
Speaker 1: episode we need to discuss a few types of insurance
Speaker 1: that everyone should be considering that that might not even
Speaker 1: be on their radar, and I said, we're gonna try
Speaker 1: to make it fun. We're gonna do the best we can,
Speaker 1: but it's still insurance. It's still insurance. It's still kind
Speaker 1: of a boring topic. But we're gonna do our best
Speaker 1: not to sound like insurance sales people because that would,
Speaker 1: of course be annoying. And we're going to try and
Speaker 1: discuss how to think about insurance well too, so we
Speaker 1: don't overdo it and spend too much, but we also
Speaker 1: don't want to forsake it altogether when we do need
Speaker 1: to be insured. And first, let's discuss the overarching role
Speaker 1: that insurance should play in our lives, Matt, because I
Speaker 1: think that can kind of be helpful as we're attempting
Speaker 1: to frame this conversation and helping people think about the
Speaker 1: role that insurance plays in their lives. Yeah, so it's
Speaker 1: a good point. You know, it definitely depends on what
Speaker 1: type of insurance that we're talking about. You know, some
Speaker 1: like health insurance, you'll probably want to utilize often as
Speaker 1: that's how you actually realize the value of that insurance.
Speaker 1: But then most others, like home and auto insurance, you'll
Speaker 1: you want to just view as a necessary backup plan.
Speaker 1: It's there in case you need it, but you're you know,
Speaker 1: you're mostly hoping that you won't need it. It's kind
Speaker 1: of like that through to six months emergency fund. It's
Speaker 1: there to provide some peace of mind, and then you
Speaker 1: can actually utilize it if you find yourself in a
Speaker 1: precarious position, maybe involving you know, job loss or a
Speaker 1: major unforeseen expense. Yeah, that's a good primer. I think
Speaker 1: that helps set up the conversation. Right. Some of these
Speaker 1: insurance products that we're gonna talk about are ones that
Speaker 1: we hope we never use, so we're gonna talk about
Speaker 1: how you buy it then if you're hoping not to
Speaker 1: use it. And then other types like health insurance, Yeah,
Speaker 1: you're gonna use it frequently, even just for a regular
Speaker 1: doctor visit. Right, Yeah, Okay, how about quick little analogy, Joe.
Speaker 1: It makes me think of if you have a little
Speaker 1: kitchen fire. There are some types of insurance that are
Speaker 1: like using a fire extinguisher. Like if you have an
Speaker 1: actual kitchen fire, which you hope rarely ever happens, you
Speaker 1: do want to use the fire extinguisher and put it out.
Speaker 1: That would definitely be the case for something kindastrophic happening
Speaker 1: to your actual home or you know, life insurance, that
Speaker 1: kind of thing. But oftentimes once you use it, uh,
Speaker 1: it's kind of like a one time thing, you know,
Speaker 1: like you use it and then you lose it, you're
Speaker 1: likely going to have to completely replace that policy. But
Speaker 1: then there are other types of insurance, like health insurance
Speaker 1: that you can view as more like a tool. In
Speaker 1: that case, it makes me think of like a rainshood.
Speaker 1: So you're doing you're cooking, you haven't had a fire yet,
Speaker 1: but there's a lot of smoke, and so you want
Speaker 1: to make sure to kick that fan on and get
Speaker 1: that smoke out of there because you don't want to
Speaker 1: cough on that stuff. Is that preventative measure? Yeah, there
Speaker 1: you go. Yeah. But part of the problem with insurance
Speaker 1: to Matt is that buying insurance is so not fun, Like,
Speaker 1: it's not a joy to do, and so most people
Speaker 1: avoid it partly because of that. It's either a something
Speaker 1: they haven't thought about or be it's something annoying, and
Speaker 1: so they're just putting it off. Nobody really wants to
Speaker 1: spend their money on insurance either, right, It's not a
Speaker 1: sexy purchase. It's not like getting a ski do or
Speaker 1: a jet ski or whatever you I don't know, you know,
Speaker 1: one of those awesome things to play on the water,
Speaker 1: or a boat. I mean, there are so many fun
Speaker 1: things you can spend your money on. An insurance it
Speaker 1: certainly is not one of them. It just kind of
Speaker 1: exists in the background for so many people. But it's
Speaker 1: important to realize right that certain insurance products are really
Speaker 1: important for us to have, and in those instances, it's
Speaker 1: essential for us to go ahead, bite the bullet and
Speaker 1: do the grown up thing right, because what we're really
Speaker 1: doing if we don't have the insurance that we need
Speaker 1: is we're putting our our finances at risk, and in
Speaker 1: some cases we're putting a whole lot of our net
Speaker 1: worth at risk by not being properly insured. I'm kind
Speaker 1: of still wondering why why you use boat or a
Speaker 1: ski do as an example instead of like a bike.
Speaker 1: I just think of like and we use bike as
Speaker 1: as examples way to bout some problems and when we
Speaker 1: need to appeal to other people. When you think about
Speaker 1: the goofiest, most quote unquote fun thing you could spend
Speaker 1: it on, I don't know. My mind always goes to
Speaker 1: like a jet ski or something like and I'm like,
Speaker 1: I see like the smiles on people's faces when they're
Speaker 1: riding around on those things, just happing a blast. Yeah,
Speaker 1: it looks like they're having a good time. But Joe, Okay,
Speaker 1: you mentioned properly insured though, Like that's another question that
Speaker 1: we should ask, like what does it mean to be
Speaker 1: properly insured? And that's largely determined by a lot of
Speaker 1: individual factors. You know, whether you own a home or
Speaker 1: whether you rent, if you have dependence like a partner
Speaker 1: or a child, and you know where you are in
Speaker 1: the wealth building process. So we're gonna get into the
Speaker 1: specifics while also giving you know, some general guidelines for
Speaker 1: how to think about insurance, and then which types of
Speaker 1: insurance are most important because you know what you need
Speaker 1: insurance wise, that will vary from you know what your
Speaker 1: neighbor you know, or your best friends sitting across from
Speaker 1: you what they need. With each type of insurance we discuss,
Speaker 1: will attempt to bring up the nuances of how your
Speaker 1: age and how your life stage will impact that decision. Yeah,
Speaker 1: there's gonna be a lot of helpful information in this episode,
Speaker 1: but also it's not going to be completely comprehensive because
Speaker 1: we're talking about a lot of different kinds of insurance,
Speaker 1: and we're gonna do our best to kind of run
Speaker 1: the gamut, but we're not going to dive incredibly deep
Speaker 1: because the episode would just be way too long then, So,
Speaker 1: but we'll talk more about insurance, and in particular, we'll
Speaker 1: get to some of the insurance policies that you should
Speaker 1: be avoiding. First off, we'll get to those right after
Speaker 1: the break, right, Juel, back from the break talking about insurance,
Speaker 1: and let's start to cover now some of the most
Speaker 1: common types of insurance that we hear brought up. And
Speaker 1: here's the thing. Before we get into some of the
Speaker 1: legits insurance policies that people should consider, let's talk about
Speaker 1: some of the popular ones that we want folks to avoid,
Speaker 1: including extended warranties. Man, those are basically a type of
Speaker 1: insurance that many people often get when buying products, especially
Speaker 1: consumer electronics. They sell it right there at the register.
Speaker 1: But those are actually one of the worst types of
Speaker 1: insurance that we can buy. Yeah, Man, I think one
Speaker 1: of the problems with extended warranties is it's got this
Speaker 1: positive connotation for people when when we're protecting your investment
Speaker 1: exactly exactly, but well, you don't realize there's so many
Speaker 1: reasons why, and extended warranty is a bad bat and
Speaker 1: that's because you're ensuring a rapidly depreciating asset and also
Speaker 1: typically one that rarely breaks. Yet typically a third of
Speaker 1: people end up purchasing them. That's in large part because
Speaker 1: they're sold and Matt, that's what the problem is in
Speaker 1: a lot of insurance areas is that products that are
Speaker 1: not good for people are often sold to them. They're
Speaker 1: not typically something that people go out there looking to buy.
Speaker 1: But that is of course specifically true when we're talking
Speaker 1: about extended warranties. And let's take a modern flat screen
Speaker 1: TV for example, right, the failure eight for one of
Speaker 1: those TVs that you bring home within the first three
Speaker 1: years is like five. There's an incredibly small chance that
Speaker 1: your TV is gonna break down and you're gonna have
Speaker 1: to repair it within the first years of ownership that
Speaker 1: you'd be covered by that extended warranty. But on a
Speaker 1: five TV, you'd likely be paying something like a hundred
Speaker 1: and fifty dollars for that insurance policy, that extended warranty
Speaker 1: that you're unlikely to actually use and That's the way
Speaker 1: it is for so many gadgets and personal electronics that
Speaker 1: we buy. If you were to consistently buy extended warranties
Speaker 1: on every personal electronic device that you brought into your life,
Speaker 1: you'd be forking out a lot more money over time
Speaker 1: than you would be saving yourself when it comes to
Speaker 1: repairs for for those devices that you brought home. Yeah,
Speaker 1: you know when when it comes to these warranties, Man,
Speaker 1: since we're human, we always remember the one time that
Speaker 1: an extended warranty actually came through in a clutch, not
Speaker 1: the dozen other times that, you know, what we paid
Speaker 1: for it and when we didn't actually need it. Oftentimes
Speaker 1: we're better off self insuring, and what that means is
Speaker 1: just having you know, savings and money in the bank,
Speaker 1: or just finding a cheaper way to ensure our products.
Speaker 1: For for instance, cheaper insurance for a cell phone would
Speaker 1: be just to have a case on it. Just think
Speaker 1: about how much more affordable and stylish uh that case
Speaker 1: would be versus you know, paying for an extended warranty.
Speaker 1: And additionally, when you are buying any electronics, it's incredibly
Speaker 1: helpful to make sure that that purchase is done with
Speaker 1: a credit card that extends the manufacturer's warranty, you know,
Speaker 1: basically giving you some of that additional coverage for free.
Speaker 1: And even if you haven't put it on a solid
Speaker 1: credit card, don't forget about just the manufacturer's warranty. Uh.
Speaker 1: Oftentimes with electronics you have at least one year and
Speaker 1: you know what, even if there is a problem and
Speaker 1: maybe you're just outside that one year window, reach out
Speaker 1: to the manufacturer like I did recently with our with
Speaker 1: our dishwasher, and you know what, maybe that really worked
Speaker 1: out for us. They were willing to make a one
Speaker 1: time courtesy repair and we've got basically a bran new dishwasher. Yeah,
Speaker 1: the credit card I used to buy the computer that
Speaker 1: I bought a year ago, double the warranty from from
Speaker 1: the manufacturer. I have a four year warranty on my computer.
Speaker 1: That's so good, right, Who needs the multi hundred dollar
Speaker 1: policy that goes along with it, the extended warranty. Basically
Speaker 1: they'd just be throwing money out the window if I
Speaker 1: got that. And at the same time, to Matt, one
Speaker 1: of the things people can do is to make sure
Speaker 1: they look at ratings on a site like Consumer Reports
Speaker 1: or JD Power and they can find out which products
Speaker 1: are more reliable before they make the purchase too. I
Speaker 1: feel like that's so helpful and actually gives you peace
Speaker 1: of mind in avoiding the extended warranty altogether. All right, now,
Speaker 1: let's talk about pet insurance. That's another type of insurance
Speaker 1: that we don't think is a good idea for most people.
Speaker 1: And it's actually a question that's come up a good
Speaker 1: bit in our Facebook group. Obviously, people want to make
Speaker 1: sure that the furious member of their families taken care of.
Speaker 1: That's kind of the reason that people think about getting
Speaker 1: pet insurance. They want to make sure that their little
Speaker 1: pets okay if something were to happen. And I'll give
Speaker 1: a caveat here, if you have, in particular an older
Speaker 1: pet or a breed that's particularly prone to health issues,
Speaker 1: it could work out in your favor to have a
Speaker 1: pet insurance policy. But for the most part, the numbers
Speaker 1: just don't make sense when it comes to buying pet
Speaker 1: insurance for your dog or your cat or your hamster.
Speaker 1: I don't think basically, you're better off having a larger
Speaker 1: amount set aside in savings than paying those monthly premiums
Speaker 1: on that policy, and hoping it pans out. Uh. And again, Matt,
Speaker 1: when you're working with somebody like a local vet, you
Speaker 1: can talk through payment plans if you do have to
Speaker 1: have a procedure for for your dog or cat, and
Speaker 1: you can also look locally for other resources in order
Speaker 1: to find discount care for your pets health care needs.
Speaker 1: But pet insurance, when you're on the numbers, it just
Speaker 1: doesn't typically work out for people in most cases to
Speaker 1: have insurance on their pet. Yeah, I mean, you know,
Speaker 1: this is a good one to bring up because I
Speaker 1: feel that oftentimes people they spend so much money on
Speaker 1: their pets, like I'm pretty sure like all the dogs
Speaker 1: in our neighborhood and have been to the doctor more
Speaker 1: often than I have in the past. Deck, I don't
Speaker 1: think it might be worth asking ourselves, you know, is
Speaker 1: this truly necessary? Obviously there are times when it's necessary.
Speaker 1: But I also think that oftentimes people need to to
Speaker 1: not feel guilty for not having that kind of insurance
Speaker 1: on their pets. Um and related to them. And let's
Speaker 1: talk about life insurance, but not for you know, grown ups,
Speaker 1: but for kids. Uh. This one really frustrates me. Life
Speaker 1: insurance should be specifically purchased for replacement of income, and
Speaker 1: that's why you should not have policies on your children.
Speaker 1: Yet there are lots of companies and insurance folks that
Speaker 1: love selling these policies and their expensive whole life policies
Speaker 1: at that they are a major money maker for companies
Speaker 1: that sell them. Uh And similar to pet insurance, it
Speaker 1: can be an emotional decision. There's a lot of potential
Speaker 1: guilt involved, you know, like, if I don't get life
Speaker 1: insurance for my kids, do I love them? Well, of
Speaker 1: course you do. But maybe instead of getting life insurance,
Speaker 1: you can open a five twenty nine account, or you
Speaker 1: can just start saving for their future in other meaningful
Speaker 1: ways instead. What makes me think about the the the
Speaker 1: Gerber life insurance policies that show up in the mail. Basically,
Speaker 1: once you have a kid, you'll start getting these mailers
Speaker 1: and they're basically trying to convince you to buy life
Speaker 1: insurance for your kids. You don't need it, yeah, And
Speaker 1: one of the reasons I think that that a lot
Speaker 1: of parents do you get that is one out of
Speaker 1: guilt and then too because they're like, well, if something
Speaker 1: terrible would happen, right, Funeral costs are expensive, but they're
Speaker 1: not all that expensive, and again you're better off being
Speaker 1: self insured against the unlikely event as opposed to having
Speaker 1: insurance for the incredibly improbable thing. And Matt another similar
Speaker 1: thing is unemployment insurance. Right. This insurance covers your essentials
Speaker 1: if you were to lose your job, and it sounds smart, right,
Speaker 1: and in particular in the pandemic these days, it sounds
Speaker 1: really smart. It's like, oh, man, I wish I had
Speaker 1: had that, but you'd be better off skipping that insurance
Speaker 1: and self insuring again by having a couple of months
Speaker 1: of expenses on hand. And by the way, we keep
Speaker 1: mentioning this as the antidote to the worst insurance policies
Speaker 1: out there, that it's substantial savings and being self insured,
Speaker 1: but there's no way of getting around that. That's going
Speaker 1: to be kind of a theme throughout this episode that
Speaker 1: in order to avoid some of the worst types of
Speaker 1: insurance that cost a lot and that you're really in
Speaker 1: all likelihood not going to need their more specific types
Speaker 1: of insurance, well, then you do have to do a
Speaker 1: good job of being a diligent saver and having money
Speaker 1: in the bank so that any of these things were
Speaker 1: to happen, you do have the savings on hand to
Speaker 1: pay for the procedure or cover your monthly bills if
Speaker 1: you were to to lose your job. And at the
Speaker 1: same time, map there's unemployment insurance through the state. All
Speaker 1: fifty states offer this, and obviously that's been a benefit
Speaker 1: to a lot of people recently. So they need to
Speaker 1: specifically have unemployment insurance. It's just not there for most people.
Speaker 1: It feels a little bit redundant. And you know, you
Speaker 1: mentioned having that emergency fund set up. I feel like
Speaker 1: that's this is a case for having maybe a larger
Speaker 1: emergency fund as well. You know, if if you are
Speaker 1: looking at some of these different types of insurance and
Speaker 1: you're thinking, oh, that one would really come in handy
Speaker 1: because you know, I have a pet, or oh my
Speaker 1: job is a little unstable, you know, so maybe unemployment
Speaker 1: insurance might be handy for me as well. These are
Speaker 1: all reasons maybe to like increase your emergency fund instead
Speaker 1: of you know, at the bare minimum of two thousand,
Speaker 1: four hundred and sixty seven dollars, bump it up to
Speaker 1: three months, and then maybe for each additional thing like
Speaker 1: oh I have a pet, well, then maybe bump that
Speaker 1: emergency fund up to four months. Then say, maybe you've
Speaker 1: purchased a bunch of fancy electronics, maybe it's worth bumping
Speaker 1: up from four most to five months. Essentially, the more
Speaker 1: sort of like liability that you have, it's worth having
Speaker 1: additional cash on hand. And then the added bonus is
Speaker 1: that you're going to be earning interest on that money
Speaker 1: as it sits there in your own account. Granted, you're
Speaker 1: not gonna be earning that much these days, but I'd
Speaker 1: rather take any interest than none at all, Joel. And
Speaker 1: then lastly, let's let's talk to about kind of like
Speaker 1: some of these hyper specific types of insurance, like like
Speaker 1: cancer insurance. There are all sorts of different insurance products
Speaker 1: in a modern age, and they can get really specific.
Speaker 1: You know, you can purchase I D. Theft insurance, or
Speaker 1: flight insurance, even insurance on your your home's waterline. I
Speaker 1: don't know if you've gotten mailers for those in the
Speaker 1: mails as well? Oh yes I have, but I avoid
Speaker 1: those like the plague that as well as those those
Speaker 1: Gerber baby life policies. Right, and if if you did
Speaker 1: sign up for all of these, uh in order to
Speaker 1: be you know, quote unquote fully covered your budgeted amount
Speaker 1: for just monthly insurance alone just for those premiums that
Speaker 1: could get pretty ridiculous. So you likely don't need these
Speaker 1: additional specific types of insurance. But now that we've covered
Speaker 1: some of the insurance products that you should not be considering,
Speaker 1: let's talk about, you know, the different insurance products that
Speaker 1: are really important for most to consider it. We'll get
Speaker 1: to those right after the break. All right, Matt, we're
Speaker 1: back from the break. We're talking about insurance and how
Speaker 1: most people out there are probably under insured, and we
Speaker 1: just kind of talked about hyper specific insurance policies, things
Speaker 1: that cater to getting a specific type of disease or illness,
Speaker 1: maybe even like baldness insurance. Oh, Man, I don't know
Speaker 1: if they have that, but I would would you would
Speaker 1: you buy that? No? Because even if I did, Man,
Speaker 1: I'm self insured on that. I'll wear a ball cap.
Speaker 1: There you go, the cheapest type of insurance when it
Speaker 1: comes to baldness. Exactly exactly. But yeah, the opposite of
Speaker 1: those hyper specific policies is looking for something a little
Speaker 1: broader that you have a higher likelihood of needing. And
Speaker 1: so yeah, when we're talking about uh insurance that you
Speaker 1: do need. In this segment, we're going to kind of
Speaker 1: focus on those kinds of insurance. For instance, everyone will
Speaker 1: die at some point, so life insurance is a natural
Speaker 1: must have, but just not for your three year old, right,
Speaker 1: unless they're like a Hollywood child star and they're the main,
Speaker 1: main breadwinner for your family. In that case, that's an
Speaker 1: exception to the rule. Right. If you get your own
Speaker 1: Macauley Culkin, you might want to get a policy out
Speaker 1: on him. Exactly. Yeah, I mean, obviously, the biggest potential
Speaker 1: money risk to almost everybody's family is one of the
Speaker 1: main breadwinners dying prematurely. So a term life insurance policy
Speaker 1: is something that everyone with dependence should have, right. A
Speaker 1: good rule of thumb is to have a policy worth
Speaker 1: ten times your annual income. And so, Matt. For folks
Speaker 1: out there who have listened to the show before heard
Speaker 1: us talk about life insurance, they know that it's important.
Speaker 1: Maybe they bought a policy years ago, but their financial
Speaker 1: situation has changed, we would say revisit it, make sure
Speaker 1: you have enough coverage for your situation. And by the way,
Speaker 1: if anyone out there doesn't have any dependence, life insurance
Speaker 1: is something you don't really need, right. It really is
Speaker 1: only necessary if you have people who would need that
Speaker 1: income in the event of your passing away early. Yeah, Juel,
Speaker 1: you know, it's also necessary to have life insurance not
Speaker 1: just when you have dependence, right what the I r
Speaker 1: S considers dependence, but also when there is somebody else
Speaker 1: who is dependence on your income. Right. So obviously I'm
Speaker 1: talking about spouses here. If you have a spouse or
Speaker 1: a partner who counts on your income, that's an instance
Speaker 1: when you definitely also want to have insurance. And you know,
Speaker 1: while we're talking about that, like, let's mention life insurance
Speaker 1: on a partner who takes care of the kids. You know,
Speaker 1: you don't always need to generate an income in order
Speaker 1: for it to make sense to have a term life
Speaker 1: insurance policy. You know, a stay at home spouse is
Speaker 1: the best example of this. Their work, although it's you know, unpaid,
Speaker 1: is highly valuable, and child care and just the countless
Speaker 1: other ways that a partner, you know, brings value to
Speaker 1: the home that would cost a lot of money where
Speaker 1: something to happen to them. So not only does it
Speaker 1: make sense to have life insurance for a primary breadwinner,
Speaker 1: but also to for for someone else who provides a
Speaker 1: massive amount of support in the home. Yeah, it's a
Speaker 1: good point. And Matt, by the way, some websites are
Speaker 1: now offering instant decision life insurance policies and those can
Speaker 1: be great. They forego the need of how having a
Speaker 1: medical professional come to your home and you know, take
Speaker 1: blood tests, check your blood pressure, those kind of things. Uh,
Speaker 1: And that's kind of nice, right to not have to
Speaker 1: deal with that. But I've also read some things recently
Speaker 1: that the convenience can actually cost you more, to the
Speaker 1: tune of thirty three percent higher premiums every month on average.
Speaker 1: So it's important to shop around at multiple sites, including
Speaker 1: Policy Genius one of our favorites. But make sure that
Speaker 1: you don't scamp or skip out on life insurance because
Speaker 1: it's one of the most important insurances that you definitely
Speaker 1: need to have in your life. And then, Joe, let's
Speaker 1: talk about disability insurance. This is uh an incredibly overlooked
Speaker 1: type of insurance. The stats show that a quarter of
Speaker 1: Americans will experience a disability that keeps them out of
Speaker 1: work for three months or longer, and most of those
Speaker 1: come from an illness, not a specific type of accidents.
Speaker 1: You know, it's not just the guy that's like skydiving. Uh.
Speaker 1: And so this means that we are all vulnerable, and
Speaker 1: so for most people, a long term disability policy is
Speaker 1: going to make the most sense if you happen to
Speaker 1: have employer provided disability insurance, and make sure to see
Speaker 1: what it currently covers, because you might need to per
Speaker 1: is a policy of your own to cover the gaps. Uh.
Speaker 1: And since many employers offer subsidized short term disability, a
Speaker 1: long term disability plan makes the most sense for individuals typically.
Speaker 1: But you know, be sure to read up on it
Speaker 1: and don't just assume that you don't need this type
Speaker 1: of coverage. Uh. And you know we've mentioned Policy Genius
Speaker 1: already this episode, but you can also go there as
Speaker 1: well to compare quotes, uh and get a policy as well. Yeah.
Speaker 1: By the way, the reason we mentioned them it is
Speaker 1: just because they shop with a bunch of different companies.
Speaker 1: So instead of just going to one company, go to
Speaker 1: a website that's going to shop them all. And that's
Speaker 1: why we're fans of Policy Genius. But make it super easy. Yeah,
Speaker 1: And Matt, just on that note to when we're talking
Speaker 1: about disability insurance and life insurance, folks out there might
Speaker 1: have a policy through work that covers them maybe even
Speaker 1: on both of these fronts. Uh. The thing is it
Speaker 1: just might not be enough. And at the same time,
Speaker 1: if you leave that employer, you lose that insurance policy.
Speaker 1: So you do want to make sure that you have
Speaker 1: your own private insurance as well. Or let's talk about
Speaker 1: Renters insurance. This is a must also. It's also one
Speaker 1: that people typically forego, which is a bummer because it's
Speaker 1: so cheap. It's one of those insurance is that is
Speaker 1: almost negligible. It costs less than Netflix every month, yet
Speaker 1: it can save you in a major way if an
Speaker 1: accident occurs. Right, it typically just costs around ten twelve,
Speaker 1: fourteen dollars a month to have Renters insurance, and that
Speaker 1: inexpensive insurance covers your possessions in case something happens. Right,
Speaker 1: Renters insurance also covers your belongings when you're traveling. Also,
Speaker 1: take a look at your lease. Your landlord probably requires it,
Speaker 1: so there's just require it. Yeah, me too, me too,
Speaker 1: and so yeah, that's one of those things that UH,
Speaker 1: tenants should take a look at. They should make sure
Speaker 1: that they have Renters insurance not only for their sake,
Speaker 1: but to comply with their lease. At the same time,
Speaker 1: and really there's just no reason not to have it.
Speaker 1: Do some shopping. If you have an insurance relationship already,
Speaker 1: ask your agent if they can quote you on that,
Speaker 1: or look around policy genius. Obviously you can go there too.
Speaker 1: There's no excuse when it's that affordable. That's right, man.
Speaker 1: And so obviously you're gonna have renters insurance if you
Speaker 1: rent a place, if you have a home. If you
Speaker 1: have a house, you're gonna have home insurance. Let's talk
Speaker 1: about home in auto insurance. Both of those are obviously necessary.
Speaker 1: You know, we dove deep on these backend episode eighty one,
Speaker 1: so if you want to know how to shop well
Speaker 1: for those, check out that episode. But something that we
Speaker 1: did want to note here is don't have too little coverage,
Speaker 1: especially as home values have risen in the cost of
Speaker 1: repairing or replacing your home have climbed. Take a look
Speaker 1: at the overall amount that you are insured for. You
Speaker 1: can ask an independent agent to to help you figure
Speaker 1: out what specific coverage you need, and there's online calculators
Speaker 1: as well that can help you figure that out. If
Speaker 1: you need more coverage and the cost is getting too steep,
Speaker 1: you can look to raise your deductible and self insure
Speaker 1: with more cash on hand. And honestly, this is a
Speaker 1: great move regardless. You know, you want to make sure
Speaker 1: that you're properly insured, but the goal here is to
Speaker 1: not have to use it. So finding a way to
Speaker 1: keep those monthly insurance premiums down is really important, yeah, Matt.
Speaker 1: In particular, homeowners insurance is one of those things that
Speaker 1: people are gonna want to have and then hope to
Speaker 1: never use. And obviously, if something major happens, something catastrophic,
Speaker 1: you use it. But the same thing is true with
Speaker 1: both home and car insurance. You don't want to use
Speaker 1: it if it's a minor thing. Even it's a roof
Speaker 1: that needs to be replaced because of hail damage or
Speaker 1: something like that. You really want to think long and
Speaker 1: hard about whether or not you pull the trigger and
Speaker 1: call your insurance company. In many cases, it's better off
Speaker 1: to hire the workout yourself, to have the money saved
Speaker 1: and avoid using your insurance. And that's because premiums can
Speaker 1: skyrocket after you use that insurance. Seems true with your
Speaker 1: car insurance, So if there's a little ding, little dent,
Speaker 1: handle it yourself and avoid actually using it in order
Speaker 1: to keep your premiums low. Yeah, all the note of
Speaker 1: homeowners insurance, flood insurance is a type of policy that
Speaker 1: some folks definitely don't need, but there are some people
Speaker 1: who really need to have it. In particular, if you're
Speaker 1: at high risk for flooding, you should look into getting
Speaker 1: a policy through FEMA at flood smart dot gov. And
Speaker 1: it's not all that expensive considering you know what you
Speaker 1: are ensuring against. Floods can create a lot of costly damage. Yeah,
Speaker 1: it's a good point, all right. Let's also mention a
Speaker 1: couple more types of insurance that people really need to
Speaker 1: have if you don't want to be underinsured, and one
Speaker 1: of them is health insurance. The number are one reason
Speaker 1: for personal bankruptcy is due to medical bills, So going
Speaker 1: without health insurance just isn't smart. But obviously too it's
Speaker 1: gotten incredibly expensive. If you have employer provided health insurance,
Speaker 1: they're typically subsidizing a huge portion of that cost, and
Speaker 1: it's important to make sure that that you have a policy.
Speaker 1: But if you don't have access to employer provided health insurance,
Speaker 1: it's important to shop on the exchange and see what
Speaker 1: sort of subsidies that you qualify for, and also if
Speaker 1: it's gotten prohibitively expensive, consider checking out a health sharing company,
Speaker 1: and Matt, you're a member of one. Most of them, though,
Speaker 1: are are affiliated with religious communities, and so I know
Speaker 1: a lot of people that listen to the show. They've
Speaker 1: asked the question if there is a health sharing company
Speaker 1: that isn't necessarily religious based, And the only one that
Speaker 1: I could find in all my research was Liberty Health.
Speaker 1: They have the least stringent requirements if you don't have
Speaker 1: any sort of particular religious affiliation. So they're one worth
Speaker 1: checking out, and it's gonna be way, way less money
Speaker 1: than an actual insurance policy. But at the same time,
Speaker 1: it's not technically health insurance, but it can really help
Speaker 1: in the case of finding yourself in a position where
Speaker 1: you had to have a medical proteger and it costs
Speaker 1: thousands or tens of thousands of dollars. Yeah, Joel, and
Speaker 1: similar to what we recommend to when it comes to
Speaker 1: auto insurance, we would recommend something similar to health insurance
Speaker 1: as well. One of the ways to obviously get your
Speaker 1: costs down every month is by increasing your deductible with
Speaker 1: auto insurance, so look to a high deductible plan when
Speaker 1: it comes to health insurance. If you're young, you're healthy,
Speaker 1: Maybe you don't have any pre existing conditions. Maybe uh,
Speaker 1: you know, there's zero family history of of any health
Speaker 1: issues at all. Those are all great reasons to consider
Speaker 1: moving to a high deductible plan. But then obviously you
Speaker 1: still want to make sure that you at least have
Speaker 1: enough money set aside to reach that deductible in case
Speaker 1: something does happen. Uh. And then, lastly, Joel, here, let's
Speaker 1: talk about an umbrella policy. One of these might be
Speaker 1: a good thing to consider if you've done a really
Speaker 1: good job accumulating assets. Uh. They're also pretty inexpensive because
Speaker 1: it's only tapped if you exceed your other insurance company payouts. So,
Speaker 1: for example, let's say you were you know, at fault
Speaker 1: in a car accident and your auto insurance only covered
Speaker 1: let's say, up to fifty thou for the other vehicle.
Speaker 1: But if that other car that you you know wrecked
Speaker 1: was worth a hundred thousand, well, guess what they're coming
Speaker 1: after you personally for that extra fifty thou dollars. That's
Speaker 1: why I don't drive next to nice cars, Matt, Yeah,
Speaker 1: avoid those lambos. Uh. That's when an umbrella policy comes
Speaker 1: in handy. It protects your assets in the event that
Speaker 1: you are liable, and like I mentioned, they're inexpensive, these
Speaker 1: policies can be really affordable to uh it's pretty easy
Speaker 1: to get a one million dollar policy for for something
Speaker 1: like twenty bucks a month. So if you've done a
Speaker 1: good job accumulating assets, you know you've got you've got
Speaker 1: a home, and you've got a good amount of equity
Speaker 1: in that home, and you want to make sure they're
Speaker 1: not coming after that, well, an umbrella policy is something
Speaker 1: definitely worth considering. And for all those mom pop landlords
Speaker 1: out there, it's another important consideration is to have an
Speaker 1: umbrella policy because one your liability is higher and to
Speaker 1: your assets are higher. Right, if you have multiple rental properties,
Speaker 1: an umbrella policy can make even more sense for you.
Speaker 1: So all right, Matt, Hopefully we were able to cover
Speaker 1: a lot of different insurance products on this show in
Speaker 1: a way that didn't put people to sleep, especially if
Speaker 1: they're driving. That's not good because then you're gonna have
Speaker 1: to use your insurance. But yeah, um, we covered some
Speaker 1: insurance products that people should typically stay away from. Then
Speaker 1: the insurance products that people need to know a little
Speaker 1: bit more about and if you find yourself maybe lacking
Speaker 1: on one of the insurance types that we mentioned, we
Speaker 1: would just encourage you to to go do some shopping,
Speaker 1: do some reading, and make sure that you're properly insured
Speaker 1: and make sure that you have enough insurance to cover
Speaker 1: yourself and your family. It's one of those things that
Speaker 1: in personal finance we don't like to think about a lot,
Speaker 1: but it is kind of this important spoke, this important
Speaker 1: component in having a good, healthy approach to your personal finances.
Speaker 1: You know what I was waiting for. It was for
Speaker 1: you to say warranty one more time, because at the
Speaker 1: earlier in the episode, you were saying warranty, but you
Speaker 1: were saying warranty. And I don't know if I ever
Speaker 1: say it like that. Our pronunciation differs sometimes I don't
Speaker 1: want to mention it, Earli because I don't want to
Speaker 1: make you self conscious, But every time you s that,
Speaker 1: it kind of made me happy. And said, now, I
Speaker 1: don't even know which way I said it, but you
Speaker 1: said you said warrant. All right, You're always really excited
Speaker 1: to avoid that extended warranty. Okay, do it all right,
Speaker 1: but let's get get back to the beer. This episode,
Speaker 1: we enjoyed a P B and J American style sour ale.
Speaker 1: And this was a beer by Shades Brewing Company, And
Speaker 1: I noticed on the top of the cane here it
Speaker 1: says that this is part of their Caveque series. Do
Speaker 1: you know how to say that? I'm pretty sure that
Speaker 1: it's like a it's a Norwegian word. Oh really, I
Speaker 1: don't know. No, I don't know that I should. I
Speaker 1: feel ashamed to call myself in Norwegian at this point.
Speaker 1: I don't know much about that except that it's the
Speaker 1: type of yeast that's like really hearty or like really robust,
Speaker 1: So it allows them to do really like aggressive types
Speaker 1: of bruise without killing the yeast. But evidently it allows
Speaker 1: for a really clean drinking beer. And so I guess
Speaker 1: on that note, I'll go ahead and share my thoughts
Speaker 1: on this beer. I wasn't sure if I was gonna
Speaker 1: like this because it's P B and J. But it's
Speaker 1: a sour you know, you can expect to have a
Speaker 1: P B and J stout, But how in the world
Speaker 1: do you make peanut butter and jelly sour beer? And
Speaker 1: somehow I feel like they were able to pull it off.
Speaker 1: Man Like, as soon as you drink get had some
Speaker 1: tartness going on, and it tasted really fruity. But then
Speaker 1: at the same time, almost instantaneously, you you pick up
Speaker 1: on some of those peanut notes. It's like sort of
Speaker 1: like this low base accompanying these these kind of high
Speaker 1: trouble notes. And I felt that they were able to
Speaker 1: compliment each other pretty well. I've never had a beer
Speaker 1: that was a sour, but it was a type of
Speaker 1: beer that that was based on a flavor profile that
Speaker 1: was a little more robust and savory. But all in all, Man,
Speaker 1: I thought they did a good job and I really
Speaker 1: liked it. What about you, What were your thoughts? So
Speaker 1: I've never been so nervous opening a beer as it
Speaker 1: was with this one, because when I read what it was,
Speaker 1: I was a little freaked out. I was I was like,
Speaker 1: P B and J sour. I don't know, that's not
Speaker 1: gonna work. Yeah, should we even drink it? I don't know.
Speaker 1: But I will say it was not my favorite beer.
Speaker 1: I'll go off and I'll be honest on that, but
Speaker 1: I agree with you. Actually, I think the flavors did
Speaker 1: work together, and it tasted like a peanut butter and
Speaker 1: jelly sandwich that had gone sour, but not sour like rancid. No,
Speaker 1: it didn't taste bad, that's for sure. Not like a
Speaker 1: peanut butter and jelly sandwich that was left in a
Speaker 1: lunchbox and it was left out on the ground for
Speaker 1: two weeks. No, not like that, like the animals got
Speaker 1: into No, nothing like that. But yeah, I thought it
Speaker 1: was an interesting conglomeration of flavors. I'm glad we tried it,
Speaker 1: that's for sure, because I love trying unique beers, and
Speaker 1: this one was definitely unique. It's just not gonna make
Speaker 1: my top ten list, even though I enjoyed the drinking experience,
Speaker 1: even though it was made from a Norwegian yeast, I
Speaker 1: thought that would have won you over. I'll it scores
Speaker 1: points in my book for that, that's for sure. Nice well,
Speaker 1: Andy thinks again for sending this one to the show.
Speaker 1: Angel that's gonna be it for this episode. Man. Listeners
Speaker 1: can find our show notes on our website at how
Speaker 1: some money dot com. We'll be sure to link to
Speaker 1: some of the other articles that we've written in regards
Speaker 1: to insurance, as well as where you can go to
Speaker 1: find an insurance policy. Yep, and we appreciate everybody out
Speaker 1: there who listens, and if you've been listening for a
Speaker 1: while and you think that Matt and I have some
Speaker 1: room for improvement, but we'd love to hear from you,
Speaker 1: you can just go to how the Money dot com
Speaker 1: slash do better, drop us a line, and let us
Speaker 1: know how you think we can make this show a
Speaker 1: better place to learn about personal finance, because that's always
Speaker 1: our goal, to make this show an awesome place to
Speaker 1: learn about personal finance and a helpful and constructive way.
Speaker 1: All Right, Matt, that's going to do it for this episode.
Speaker 1: Until next time, best Friends Out, Best Friends Out,