Insurance and Finance

Prepare for the costs of being uninsured

By Matt Becher 5.8.13

Life changes — fast. Whether or not you’re prepared for the unexpected makes all the difference for you and your loved ones. You may not think you need it, but the cost of going without coverage can impact your entire family.

Disaster can strike any second, and your loved ones may be left shouldered with the expenses — and the hardship — of your absence. Drew Pemberton, a Texas Farm Bureau Insurance Agent based in Collin County, knows this well: “People can be so focused on buying things now, but without coverage, if something happens to one of the major breadwinners unexpectedly, the other spouse is left with the burden.”

When choosing insurance coverage, we tend to skew our decisions based on the information in front of us — usually, how much more we’re going to have to pay to protect our life and liabilities.

When the unexpected happens suddenly, the burden for the uninsured (and even their immediate family) can be immense, and being left unprepared is a recipe for serious financial woes.

Pemberton deals firsthand with the consequences all the time. Last year, he worked with a man who had recently lost his wife, had no idea as to whether or not they had any coverage, and could not afford the burial. Fortunately, his wife had taken out a policy with another company, and they were able to locate it. In the midst of grieving, worrying about being able to cover the cost of final arrangements should be the last thing on anyone’s mind.

How much do you need?

There are a number of costs to consider when tallying up your potential final expenses, and how much life insurance coverage you’ll need. The amount needed is different for everyone — that’s why, Pemberton asserts, it’s important to review your individual financial needs.

“It’s always better to ask a series of questions. Lay the bills out on the kitchen table and figure out exactly what you need,” he says. Having an inheritance, or other investments to draw on, may reduce the amount of coverage needed as well.

Caring for your dependents, supplementing the perks of your employee benefits in addition to something accounting for your base salary, and any plans for inheritances to be left behind or charitable contributions will depend on your individual income and expected needs.

Your Texas Farm Bureau Insurance Agent can weigh in as well, providing his or her own expertise on what coverage works best for you. It’s also important to review your options frequently to find the best plan for your situation. An agent can find discounts you may not even know you qualified for, or may only recently be eligible for, so frequent reviews can make a huge difference.

When your agent knows what you need and how much you’re spending, he or she can even recommend ways to cut costs and make your payments fit into your budget: skipping a restaurant visit once or twice a month, for example, or switching service providers for utilities or security.

While there’s no one right answer as to exactly how much coverage is sufficient, the necessity of coverage is obvious to those looking to prepare for the future and mitigate disaster, both for themselves and the loved ones in their life.