More, Less, or just Enough?

[Carrie Earls]

Here's an insurance question for you.

How do you determine whether or not you are properly insured, based upon your financial picture?

What I mean is this: Some people have greater means than others. That's obvious. But the family who makes $200,000 per year is going to view insurance differently from the family who makes $20,000 per year. Yes, it is definitely wise to be insured, but not to the point that you can't pay your bills due to the cost of your insurance premiums. On the other hand, some people make so much money that certain types of insurance become unnecessary.

Where do you draw the line? Which type of insurance is most important? Least important? How do you determine your limit?

[jamesglewisf]

I'm not sure which kind of insurance you are talking about: homeowners, auto, life, health, disability, or business? All of the above?

Which type of insurance is most important depends upon a lot of things such as: your age, marital status, spouse's age, age of children (if any), vocation, income level, financial situation, debt level, savings level, etc.

It is really hard to answer this question without looking at the specifics. It is kind of like trying to answer, "What colors should I paint the rooms of my house?" when the designer hasn't seen the rooms, furniture, and home style. And unless the designer spends some time getting to know your individual tastes, s/he can't answer the question even if s/he has seen the rooms.

Your best option is probably to get with an insurance agent that is also a certified financial planner. They can get to the answer the fastest.

It will be hard to answer such a big-picture question here without getting into the details that you would with a financial planner.