Question

Andy and Becca are a young professional couple (family practice physician and personal injury plaintiff’s lawyer, respectively), both in private practice with an office at home. They own their home (with a mortgage) and two economy cars (outright) of recent vintage. They expect to finish paying off their student loans next year. They have a 5-year old son and a 2-year old daughter. Their furnishings and decorations are modest, as are their possessions, except for Becca’s engagement and wedding ring (valued at $10,000) and the baseball card collection that Andy inherited from his dad (3,000 cards from the 50’s, 60’s, and 70’s, including many Hall of Fame players) What insurance coverages should they buy in order to protect their assets and future earnings?

Answer 1

Hi,

please find my answer as below:

Here Andy and Becca both are young professional. They want a insurance coverage to protect their assets and want to protect their future earnings. In the above description, limited information has been given about their assets and values. Even their life style and future earnings and needs for future has not been mentioned. So, first, they need to sit down and run through an "insurance needs analysis," which breaks down how much insurance they should purchase in order to achieve various goals. Their home (with a mortgage) and two economy cars (outright) cost has been not mentioned here. So, may want to have the mortgage paid off and it is a liability for them, Even do not have any information whether the car has been taken on loans. Assuming car also has been taken on loan, in such case that is also a liability and insurance needs to be taken to pay off.

As per above information, they have a 5-year old son and a 2-year old daughter. For the kids there would be a future education and schooling cost which should be accounted for. and they should have income provided for life which may secure their future earnings.

Since both are in private practice and self-employed or don't have a benefits plan, it is very important to get a disability insurance quote from an insurance agent. Although, it is very costly and may cross the premium amount $100 a month. Disability coverage may be your most expensive insurance policy, but it's protecting the asset you need the most.

It is very required to take life and disability insurance side by side. Assume, Andy and Becca, working career with a $45,000 annual income, assuming increases income over time, may see that income grow by 4 per cent a year, translating into more than $4.25-million of total earnings over a 40-year career. Over time, part of your take-home pay is slowly converted into tangible assets and investments, but while you are younger, your future potential income is one of the most important aspects of your financial well-being. At a same time, take a term insurance, which may secure your loved one future in case of one is expired due to any circumstances. Money can be used for a wide variety of purposes: final expenses, income replacement, paying off mortgage and other debts, childcare/education costs, and other short- and long-term expenses.

At last, I would say that insurance coverage is depends on financial needs and requirement. So, before taking any insurance analyse the need first and then go for it.

Hope this helps :)