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Money Smart: Protect your future with insurance policies

Whatever life throws at you, you can avoid costly setbacks by preparing now. Here are a few insurance policies to consider in order to protect your future.

SAN ANTONIO — Whatever life throws at you, you can avoid costly setbacks by preparing now. Here are a few insurance policies to consider in order to protect your future.

Health Insurance

The pandemic has shifted people’s priorities especially when it comes to health and wellness. During open enrollment season, it’s important to consider if the health plan you selected last year is right for you again.  

“Like flexible spending accounts. Those are dollars that you get tax advantages on but you have to use them by the end of the year,” said Karl Eggerss, senior wealth advisor and partner of Covenant. “With a health savings account, not only can you have a higher deductible, health-care policy but you can save for retirement. Health savings account are the best retirement vehicles around not just a medical account.”

Life Insurance

A life insurance policy ensures that a designated beneficiary will receive money, if the insured person dies. The coverage provides reassurance that financial support will be guaranteed to loved ones who must carry on without you.

“Did you have a new baby? Did you potentially get married or divorced during the year? Does your life insurance needs, need to change? How much life insurance do you have outside of your employer, impacts how much you might need with your employer,” said Eggerss.

Disability Insurance

Disability insurance provides a source of income for an employee who can’t work anymore due to a disability. Keep in mind, most life insurance policies will not cover mental or physical disabilities.

“People are generally, 3 times as likely to become disabled than they are to die. Disability insurance is something that is often, overlooked. But with your employer, it can cover 50% of your salary or 60%. You need to determine what’s best for you and your family,” advised Eggerss.

Umbrella Insurance

This type of coverage is exactly what it sounds like. An umbrella that covers and protects you. The insurance helps pay for expenses that exceed a person’s home or auto policy.

“There are very, very cheap and they cover you from liability from various accidents happening again, where you may be liable on your house and so forth,” said Eggerss. “An umbrella policy is extremely important when you’re trying to look at your overall financial picture and assessing your risks.”

As you review your insurance policies, Eggerss also advises people to look over their 401(k) contribution.

“Not only how much you are contributing but where those dollars are going. In other words, how is it allocated?” asked Eggerss. “Most people put in 401(k) contributions pre-tax, but if you’re in a low tax bracket, you might consider a ROTH 401(k) if your employer has that available to you. Because you may not need that deduction today, but maybe down the road in retirement when you have a little higher income that may be the time you want it.