💸 Making Sense of Insurance 💸

🔍 In this Issue

• This Week's Money News

• Making Sense of Insurance

• Weekly Tidbits

• Introducing Something New

Need to catch up? Read our latest issues here.

A curated selection of money news from the week

This Week’s Money News

• 🟤 Judge Ketanji Brown Jackson has a new memoir. Read her most recent interview with the Harvard Business Review here.

• 🟤 Money Dysmorphia is on the rise. Here’s what it is, how to recognize it, and some tips to overcome it.

• 🟤 It’s Breast Cancer Awareness Month. Here’s what Black women need to know about metastatic breast cancer. Read below for more on how to protect yourself financially against critical illnesses like this.

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Insurance Overview

Making Sense of Insurance

If you’re like me, you’ve heard the term ‘generational wealth’ floating around the Black community for a while now. While I hear the term come up a lot, I rarely hear it in the same conversation as insurance, which is quite interesting to me, given insurance is a crucial tool used to protect and pass on wealth.

We won’t discuss generational wealth for now. For this issue, I want to focus on some insurance details.

What is Insurance?
If you read last week’s weekly tidbit section, you’ll remember that insurance protects the insured against financial losses. In today’s world, we have policies to protect against all sorts of potential financial losses. Here are a few you may know about and others you may be less familiar with.

🛡️ Health Insurance: Helps to cover medical expenses

🛡️ Life Insurance: Provides financial support to your dependents in the event of your death.

🛡️ Auto Insurance: Covers the costs of accidents, automobile repairs, and sometimes, medical expenses

🛡️ Long-Term Care Insurance: Helps cover the costs of nursing home and other long-term care as you age

🛡️ Umbrella Insurance: Offers extra coverage beyond the coverage limits of other insurances like homeowners or auto insurance 

🛡️ Critical Illness Insurance: Provides a lump sum payment to the policyholder if they are diagnosed with a serious illness covered by the policy. Unlike health insurance, critical illness insurance gives a fixed payout that can be used for any purpose.

Insurance and Open Enrollment
During open enrollment season, most of us rush to ensure our health, dental, and vision are taken care of. This season may be a good time to review what other insurance options we want to add to our plans. Companies often offer these additional insurance policies to their employees to help protect the employed against unexpected hardships.

🩷 Basic and Supplemental Life Insurance: These coverages typically provide a death benefit to the employee’s beneficiaries. In the unfortunate event of your passing, this benefit can cover up to twice your salary and provide financial support for your beneficiaries.

🩷 Disability Insurance: Short-term and long-term disability insurance provide income for a short (usually six months) or long-term period if you cannot work. 

🩷 Critical Illness Insurance: Since it’s Breast Cancer Awareness Month, this benefit is close to my heart. Critical illness insurance provides a lump-sum payment if an employee is diagnosed with a critical illness. Cancers are typically covered, but so are other critical illnesses like heart attacks and strokes.

🩷 Legal Insurance: This benefit is often overlooked but can come in handy for expenses like estate planning, traffic violations (yes, that speeding ticket you need to go to court for counts), or family law matters.

It’s essential to review what your company offers and be sure you’re reading the fine print. Sometimes, these benefits end as soon as your employment with the company ends. In this case, it can be wise to purchase additional insurance outside of your employer-provided offerings. Talk to your Certified Personal Finance professional to see what’s right for you.

What Insurances Do I Need? 
While some insurance coverages are legally required, like auto insurance, your other insurance needs are highly personal and dependent on a few key factors. Here are some things to consider when evaluating additional insurance coverages.

🟤 Do you have dependents or someone dependent on your income for their well-being? Think children, partners, parents, or other loved ones.

🟤 What are your wealth-building and legacy goals? Can insurance fit into those in ways that aren’t already covered by other assets?

🟤 Does your prior or family health history suggest the potential for a critical illness, like breast or other cancers, to occur in the future?

🟤 How much can you afford to pay for insurance coverage?

This is not an all-inclusive list of considerations. Your first step toward holistically evaluating what makes the most sense for you is setting down with a Certified Financial Planner that will help you identify where insurance can support your long-term wealth goals. If you need help finding a CFP, check your employer’s benefits. Many employers offer Ayco, which provides employees with free financial planning services. Otherwise, you can start here to find a CPF that fits your needs. Don’t be afraid to ask the scary questions! Knowing you have what you need in place will help you achieve a greater sense of peace around your money.

Weekly Tidbits

A Few More Things…

💬 Money Vocabulary:
Hedge: A hedge is an investment that is selected to reduce the potential for loss in other investments because its price tends to move in the opposite direction. Read more here.

🧘🏾‍♀️ Mindful Money Prompt:
Can you define your value system? If so, how would you define it, and what do you value? How can you align your spending to support those values?

📠 Money Quick Fact:
According to Pew Research’s 2023 study, only 6% of Black adults in the U.S. make at least $100,000 annually. Still, we’re optimistic about our money. Read more here.

Celebrating the Journey

🎉 Introducing a New Way to Celebrate You

Did you get a higher-paying job, pay off a credit card, or meet a savings goal? No matter what your money accomplishment is, we want to celebrate you! Share your money wins here for a chance to have them featured in future newsletters and on Ed. Opal socials!