When I worked as a personal financial counselor, I was almost always able to improve upon my client's insurance coverage. Often, folks had serious gaps in needed coverage and were spending too much on unnecessary or overpriced policies. 

The point of insurance is to protect your assets, yourself and your loved ones. The following questions can help you to quickly diagnose how much room for improvement you may have with your current insurance policies and strategies.




Answer ‘yes' or ‘no' to each of the following questions:

•   Do you understand the individual coverages, protection types, and amounts of each insurance policy you have?
•   Does your current insurance protection make sense given your current financial situation (as opposed to your situation when you bought the policies)?
•   If you wouldn't be able to make it financially without your income, do you have adequate long-term disability insurance coverage?
•   If you have family members who are dependent on your continued income, do you have adequate life insurance coverage to replace your income should you die?
•   Do you know when it makes sense to buy insurance through discount brokers, fee-for-service advisors, and companies that sell directly to the public (bypassing agents) and when it doesn't?
•   Do you carry enough liability insurance on your home, car (including umbrella/excess liability), and business to protect all your assets?
•   Have you recently (in the last year or two) shopped around for the best price on your insurance policies?
•   Do you know whether your insurance companies have good track records when it comes to paying claims and keeping customers satisfied?

If you answered "no" more than once or twice, don't feel bad as nine out of ten people aren't optimizing their insurance. In future articles, I will detail what specific policies you need and where to best buy them.

Copyright Eric Tyson, 2008 - 2012 all rights reserved.

Eric Tyson is the only best-selling personal finance author who has an extensive background as an hourly-based financial advisor and who does not accept speaking fees, endorsement deals or fees of any type from companies in the financial services industry or product or service providers recommended in his articles, books and his publications.