132R Insurance | A Framework

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132R| Understanding and Examining Your Insurance Needs
ChooseFI has partnered with CardRatings for our coverage of credit card products. ChooseFI and CardRatings may receive a commission from card issuers.
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.  See our disclosures for more info.

ChooseFI Favorite: top rewards card for beginners

Chase Sapphire Preferred Card​

ChooseFI’s top pick for travel rewards! The Chase Sapphire Preferred Card has a 60,000 point sign-up bonus (after spending $4,000 in the first 3 months). The points are ultra-flexible and transfer to 13 airlines and hotels. $95 annual fee.

ChooseFI Favorite: top rewards card for beginners

Chase Sapphire Preferred Card​

ChooseFI’s top pick for travel rewards! The Chase Sapphire Preferred Card has a 60,000 point sign-up bonus (after spending $4,000 in the first 3 months). The points are ultra-flexible and transfer to 13 airlines and hotels. $95 annual fee.

Brad and Jonathan discuss community, takeaways from Lisa Duke, and insurance policies.

Community

Recently, Jonathan moved into a new home in a neighborhood near Brad’s. In a short amount of time, he has already met several of the neighbors. Many just came to his door to introduce themselves and welcome him to the neighborhood. The feeling of community is already strong but Jonathan wants to keep it growing.

What are you doing to build community near your home? Could something as simple as a baked good and an introduction truly change your community for the better? The only thing to do is try!

Another great way to build community is to join your ChooseFI local group.

The Hedonic Treadmill

In this week’s episode, Lisa Duke aptly called their pre-downsizing life a hedonic treadmill of pleasure. The couple would buy things for their feeling of happiness but it would quickly fade as the payments wore on for years.

For decades, it is possible to simply keep assuaging any feelings of unhappiness with more stuff. Whether that is the small purchases like a fancy dinner out or the bigger expenses like an expansive home. Although your life maybe Pinterest perfect, that does not necessarily mean you are happy.

With the pursuit of FI, you are forced to actually stop and think about your happiness. As Taylor showed in Playing with FIRE, the mindset shift can be world changing. Although it is not necessarily easy to stop and realign your spending with your values, it can lead to long-term happiness.

It is not about deprivation. We are not depriving ourselves here. We’re not living lives of being misers or anything insane like that. It is just simplifying. It is finding out what do you enjoy about life?

Brad challenges the audience to find the things that light you up. Once you know what makes you happy, find a way to incorporate that into your life on a daily or weekly basis.

Listen to the full episode with Lisa Duke here.

Community Shout Outs

Let’s highlight some questions and wins from the community this week.

Side Hustle With Kelly

Kelly posted this on the Facebook group about her daughter:

Playing at the stadium. “Well, mom I need to practice either way. I might as well make money.” She’s eight and she has a side hustle game.

Travel With Naomi

Naomi posted her win in the Facebook group:

Got my Companion Pass! Thank you to this group for making me aware of this. I am so happy and grateful!! My husband and I want to use this to visit as many national parks as we can and for a trip to Hawaii. I’ll try to document all the trips. Any tips on how to further save on the national parks (we already have the park pass) or Hawaii trips?

Travel Tips!

If you are looking for a way to learn more about travel rewards, then check out our free Travel Rewards Course here. Finding ways to save money on travel expenses can be difficult at the gates of a national park. However, the Capital One Venture Reward Credit Card offers a great option through their purchase eraser feature. You just use the miles you’ve earned at one cent per mile to “erase” any travel purchase on your card.

  • Get a 50,000 point bonus if you spend $3,000 within three months of opening the account
  • Earns two miles per dollar spent
  • Earns 10 miles per dollar spent at hotels.com/venture
  • $100 statement credit every four years for Global Entry, which includes TSA Precheck
  • Miles transfer easily to family or friends
  • Miles transfer to airline partners such as Air Canada and Singapore Airlines, and you can use these foreign points to redeem domestic points on United
  • $95 annual fee which is waived the first year
  • Check out our full review of the Capital One Venture Rewards Credit Card here.

Compare this great card to other travel cards here

Deep Dive Into Insurance

Find out what kinds of insurance you actually need and where to find them. Jennifer Fitzgerlad, the CEO of Policygenius walks us through everything you need to know.

The way to think about insurance is to think about it as your safety net or your protection.

Although you never want to need your insurance policy, you’ll be glad you have it if disaster strikes. Take a minute to examine your own insurance needs here.

Health Insurance

As you take your first steps into the working world, health insurance is likely the first type of insurance you will encounter. If you are offered health care insurance through your employer, then sign up.

Not having health insurance is the most surefire way to end up in bankruptcy.

Just find a way to get health insurance, even if your only options are an expensive policy.

Auto Insurance

The rates of auto insurance policies are based on a variety of factors. It is critical that you revisit your policy at least once a year to determine if you are still getting the best deal.

Look for discounts through any professional associations that you belong to. Also, check with any alumni groups for special discounts. However, just because a company offers you a discount does not mean that you will get the best overall ate through that company. You still need to look at your options.

It is best to look at policies with an independent agency or platform that can help you find the right policy. Check back once a year.

You may be able to bundle your home and auto insurance for large savings. Check with your provider.

Home Insurance

It is critical to have enough liability coverage around your homeowners’ policy. Ensure that you have the right level of coverage.

If necessary, you can add umbrella insurance as extra liability insurance. This is usually recommended if you have assets over $1 million. Plus, legal fees are usually buried into these policies to help defend the policy and its holder.

If you have commercial properties, then you should work with an independent insurance agent to make sure that you have everything that you need. The lines between personal and commercial coverage are changing, so a professional should look at your particular situation.

Life Insurance

For most people that have any financial obligations or dependents, life insurance is a good option. If you do not have anyone that depends on your income, then you can likely forgo life insurance. A good time to get life insurance might be when you get married, have a child, or take on a mortgage.

There are two common types of life insurance:

Term: Term is a type of policy that will expire in a set number of years. You can set this up to expire when you are free of financial obligations.

Permanent: Permanent is a type of policy that you can have for your entire life if you continue to pay the premium. Whole life insurance is a common form of permanent life insurance.

Typically, term life insurance is the appropriate choice. However, permanent may be appropriate in complicated estate planning situations or in the case of an adult child that is disabled and requires your care.

If you have reached FI and no longer have financial obligations, then you may not need life insurance anymore.

Related: Get The Best Price On Life Insurance With Policygenius

Disability Insurance

Disability insurance is often overlooked but critical as an income protection measure.

Anybody who depends on their paycheck needs disability insurance, full stop.

You could potentially self insure through a robust emergency fund. However, disability insurance is still recommended. Check out our full article about disability insurance.

Related Episodes:

 

ChooseFI has partnered with CardRatings for our coverage of credit card products. ChooseFI and CardRatings may receive a commission from card issuers.
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Comment Disclaimer: Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

5 thoughts on “132R Insurance | A Framework”

  1. Hey Brad and Jonathan,
    I want to thank you both for this podcast and the interviews you have done, it is great information that has helped me turn my financial future completely around. Todays episode was great, I’ve been looking for ways to save more money in my insurance policies and this has given me some actionable take aways.

    I’m not sure if you are aware but you doubled up a segment when you were editing. At 31:28 Brad ask a question about how discounts and Jennifer gives her answer then at 33:18 it is the same segment, Brad ask the same question.

    Thank you guys for what you do I and the rest of the community greatly appreciate your hard work.

  2. Hi Brad and Jonathan,
    Thanks for another great podcast and interview! Brad was musing on whether, because he has reached FI, he still needs term insurance. Giving some thought to what life would look like for your partner and family without you is a good use of time! Since you have kids, what would life look like for Laura as a single parent? Would she need additional resources just to have the time to happily look after herself and the kids in a one adult household?
    My partner and I have different skills and interests that we contribute to maintaining our lifestyle. If he was incapacitated or died, I would be faced with hiring people to do all of the home and vehicle maintenance and IT services that he routinely provides. I wouldn’t feel so confident driving an older car without having a competent mechanic under my roof! And there’s no way I would want to deal with repairs to our rental house. He would need help simplifying the tools I currently use for our finances and investments…cause that’s my thing, not his. There’s more to the big picture than just the income each partner contributes!

  3. Hello!
    Love, love , looooove this podcast. Enjoy listening to like-minded individuals talk about sensible money hacks. Living in southern California earthquake country, wondering if you guys have any input acquiring earthquake insurance and/or if it is even worth it
    Thanks!

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