My husband and I have different perspectives when it comes to risk. He leans towards being very cautious, especially when it comes to things like insurance. I, on the other hand, am a bit more of a free spirit. This difference in viewpoints has led to some interesting conversations, and ultimately, compromises, when we’ve made decisions about our insurance coverage.
When our children were small, my husband insisted on getting a will, even though I was somewhat hesitant. Looking back, though, it was a smart move. Similarly, our insurance portfolio was quite extensive. We had car insurance, homeowners insurance, life insurance for both of us, and even a substantial umbrella policy. While my husband felt each policy was essential, I thought we could reassess our life insurance coverage, especially as our children got older. Here’s how we approached those decisions, what we kept, and what we adjusted.
Life Insurance: A Balancing Act
We had life insurance policies through Protective. I’m no longer convinced that my life insurance policy is as necessary now as it was when our children were younger. We invested in 10-year term policies for both of us when we had a toddler and a baby on the way. At that time, the idea of both children attending school full-time felt like a distant future. As the primary caregiver, I wanted my policy to cover the cost of a professional nanny in the event of my death. This aspect of the policy offered some peace of mind.
My policy provided $250,000 in coverage – calculated based on my annual salary and the number of years until our kids were in school – and the premium was about $20 per month. My husband’s policy had $1 million in coverage and cost about $50 per month. Since both children have now entered public school, we agreed that we wouldn’t renew my policy when it expired. Replacing a full-time nanny with after-school care is significantly less expensive. We ultimately decided to keep my husband’s policy because he is the primary earner.
Assessing Our Remaining Insurance Policies
Living in Florida, where car insurance costs are particularly high, we currently pay $233 per month for our family car through State Farm. We determined that we likely wouldn’t find a much better rate unless we decreased our coverage significantly, so we decided to maintain our current policy.
Homeowners insurance is another policy we take seriously. About 88% of homeowners have this type of protection. Our homeowners insurance costs $136 per month and is included in our mortgage payments. Since we live in an area prone to hurricanes, we both agree that this is a non-negotiable expense. Our policy provides substantial coverage for rebuilding costs, personal property, and loss of use if we experience a fire or other disaster. I also maintain a thorough home inventory, including my wardrobe, securely stored in the cloud.
Our umbrella policy from State Farm provides $1 million in coverage and costs around $700 annually. My husband believes we need this coverage in case a neighbor’s child injures themselves on our property or I face a lawsuit related to my freelance writing. Although these scenarios seem unlikely, we have already paid this year’s premium and agreed to revisit the policy next year.
Finally, there’s golf cart insurance. We live in a golf cart community. Golf carts come with definite advantages: lower gas consumption and easy community navigation. We also need insurance for them, however, to avoid making claims on our homeowner’s insurance if there’s an accident. Paying $95 annually for this policy is a worthwhile investment.
Finding the right balance in insurance coverage often involves compromise and ongoing evaluation. Understanding your family’s unique needs and risk tolerance is key to developing a plan that provides adequate protection while remaining financially responsible.
