Insurance Planning

Year-End Insurance Review

Insurance is often one of your largest annual expenses, yet it's frequently overlooked during year-end financial planning. A comprehensive insurance review can uncover significant savings while ensuring your coverage remains adequate as your life circumstances change.

Health Insurance Open Enrollment

Key Deadlines

• Employer-sponsored insurance: Typically October-November
• Healthcare.gov (ACA marketplace): November 1 - January 15
• Medicare: October 15 - December 7 (Annual Enrollment)
• Missing the deadline means waiting until next year (unless qualifying event)

Compare Your Options

• Review all available plan types (HMO, PPO, HDHP, etc.)
• Compare total costs (premiums + deductibles + out-of-pocket maximums)
• Check if your doctors are in-network
• Review prescription drug coverage
• Consider Health Savings Account (HSA) eligibility
• Evaluate spouse and dependent coverage options

Life Insurance

When to Review Life Insurance

• Marriage or divorce
• Birth or adoption of children
• Home purchase or significant debt changes
• Career changes or income increases
• Children becoming financially independent
• Approaching retirement

Coverage Amount Guidelines

Common methods to calculate life insurance needs:

• 10x Income Rule: 10 times your annual income
• DIME Method: Debt + Income (5-10 years) + Mortgage + Education costs
• Needs Analysis: Calculate specific family expenses and obligations

Types of Life Insurance

• Term Life: Coverage for set period (10, 20, 30 years), lower premiums
• Whole Life: Permanent coverage with cash value, higher premiums
• Universal Life: Flexible premiums and death benefit
• Variable Life: Cash value invested in sub-accounts

Homeowners and Renters Insurance

Coverage Review

• Dwelling coverage: Ensure it covers full replacement cost
• Personal property: Typically 50-70% of dwelling coverage
• Liability protection: Minimum $500,000 recommended
• Additional living expenses: Coverage if home is uninhabitable
• Special items: Jewelry, art, collectibles may need riders

Home Insurance Discounts

• Multi-policy discount (bundling with auto insurance): 15-25%
• Security system: 5-20%
• Fire/smoke alarms: 5-10%
• Claims-free discount: 5-10%
• New home discount: 8-15%
• Loyalty discount: 5-10% after several years
• Higher deductible: Can save 10-30%

Auto Insurance

Coverage Types

• Liability: Required in most states, covers damage to others
• Collision: Repairs to your car from accidents
• Comprehensive: Theft, vandalism, weather, animals
• Uninsured/Underinsured Motorist: Protection when other driver lacks coverage
• Medical Payments/PIP: Your medical bills after accident

When to Drop Collision/Comprehensive

Consider dropping these coverages if:

• Car is worth less than $3,000-$4,000
• Annual premium + deductible exceeds car's value
• You have savings to replace the vehicle

Auto Insurance Discounts

• Multi-car discount: 10-25%
• Bundling with home insurance: 15-25%
• Good driver discount: 10-25%
• Low mileage: 5-15%
• Good student: 10-25%
• Defensive driving course: 5-10%
• Safety features: Anti-lock brakes, airbags, anti-theft
• Pay-in-full discount: 5-10%
• Paperless/auto-pay: 2-5%

Umbrella Insurance

Umbrella insurance provides additional liability coverage beyond your home and auto policies:

• Covers $1-5 million in additional liability
• Relatively inexpensive: $150-$400/year for $1 million coverage
• Protects against lawsuits and major accidents
• Required for high net worth individuals
• Covers incidents not covered by other policies

Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA)

FSA Use-It-Or-Lose-It Rule

FSA Eligible Expenses

• Doctor visits and copays
• Prescriptions and over-the-counter medications
• Dental and vision care
• Medical equipment and supplies
• Contact lenses and glasses
• LASIK and other vision correction

HSA Benefits

• Triple tax advantage: Deductible, tax-free growth, tax-free withdrawals
• Funds roll over annually (no use-it-or-lose-it)
• 2024 contribution limits: $4,150 individual, $8,300 family
• Additional $1,000 catch-up if age 55+
• Can invest HSA funds for long-term growth
• Can reimburse yourself years later with saved receipts

Insurance Shopping Strategy

When to Shop for New Insurance

• 30-60 days before current policy renewal
• After major life changes
• If rates increased significantly without claims
• Every 1-2 years to ensure competitive rates
• When bundling opportunities arise

Comparison Shopping Tips

• Get quotes from at least 3-5 insurers
• Compare identical coverage amounts and deductibles
• Check insurer financial strength ratings (A.M. Best, Moody's)
• Read customer service reviews
• Ask about all available discounts
• Don't cancel old policy until new one is active
• Avoid coverage gaps (can affect future rates)