Let’s face it, most of us are putting in long hours today, saving for our retirement, in hopes that our nest egg will be sufficient some day for us to enjoy our golden years.
And there’s no shortage of investment advice out there…
Max out your 401(k), make sure your portfolio is diversified, contribute to a Roth IRA if you’re eligible, pay off debt, etc. ad nauseam.
Don’t get me wrong, all this advice is important to building and maintaining a nest egg worthy of your desired lifestyle in retirement.
But my biggest concern is this: what are investors doing to protect that nest egg they’ve worked so hard to build?
And I’m not talking about protection from swings in the market… I’m talking about the type of protection from financial catastrophes that can wipe out your entire nest in a single day.
It’s an unfortunate fact that accidents happen – and it’s not uncommon for jury awards and out-of-pocket court settlements to run into the millions.
While it’s difficult to pinpoint the monetary consequences of the risks you and your family take each day, the biggest mistake I see most consumers making is subscribing to the belief that they can only lose what they have.
Jury awards rarely consider the assets of the at-fault party. Instead, they’re looking at the damages the at-fault party caused.
And if the house, vehicles, savings and retirement portfolios aren’t enough to satisfy the jury award, the next stop is wage garnishment.
This is precisely why Personal Umbrella Insurance is so important.
Dollar for dollar, the Personal Umbrella Liability Policy is considered one of the best personal insurance buys.
If you’re found to be legally liable for injuring someone (consider a serious accident like pulling in front of a motorcycle), without an umbrella policy, any damages beyond the limits of coverage provided by your standard liability policies will come out of your own pocket.
Like an umbrella that protects you from the rain, a personal umbrella liability policy provides an extra layer of insurance coverage over your standard liability policies. It protects your personal assets by kicking in when your standard liability coverage is exhausted.
Let’s take an example…
You have the standard auto liability insurance amount, which is $100,000 of coverage. You cause a serious accident and damages total $650,000. Without an umbrella policy, your insurance company writes a check to the injured party for $100,000 and walks away. You’re left to settle the $550,000 balance.
With an umbrella policy, your insurance company could have paid the entire $650,000 in damages.
So what’s the cost?
Umbrella coverage starts at $1,000,000 and goes up to $10 million and higher. A typical $1 million umbrella policy will run you about $200 per year… not too bad considering the massive amount of protection you’re getting for your nest egg, as well as your other assets.