What Insurances You Need To Be Paying For

That's right, so we keep just leaning into this microphone. This is going to be an editing nightmare for Eric. Congrats, but he's been doing this for seven episodes, so he's pretty good at it. I guess he's used to our sure as Sorry about my coffee breath, Jen, it's okay. Today we are talking about insurances, the ones you need and the ones you don't need, and we're going to talk about why you need the ones you need and the reasons you could be offered the ones you don't need.

And uh so today is going to be enlightening, I hope. And yeah, and we're sharing a mike, so if you hear us bump cheeks. Uh don't get that's see and and now I'm saying things out loud that sound better in my head. Anyways, let's hear from our sponsors. I'm gonna stop talking. Today's episode has also brought to you by Leap Day. February twenty nine, can only sponsor the show every four years, so it wants you to know it for more than just the romantic comedy where Amy

Adams doesn't recognize her self worth. February twenty nine is the birthday of icons such as Tony Robbins and jaw Rule. It's also the day we celebrate our dear friend and longtime listener Jocelyn's freedom from student me. Jocelyn, We're so sad we can't be at your actual party tomorrow, but we will be celebrating from Florida with all the pizzas in your honor, and maybe we'll put Pepperonis on it.

I don't know. Let's we'll get crazy in your honor, Jocelyn. Yes, so congratulations, thanks for listening, and uh, we love you such a good sponsor. Yes, I every four years. I look forward to it. Yes, job Rule's birthday. How could you not I throw a party let's get into insurance, the nitty gritty of this fun stuff. I know this is going to be our least listened to episode, I'm sure of it. But insurance is such an important topic

because it is literally the difference. It can be the difference between a big event being a financial like inconvenience or bankruptcy. It is that important and so while we don't want to pay attention to it too much, we want to learn about it, have our insurances set up, and then go back to not thinking about them. But you do have to think about them for the amount of time it takes to actually get them. So our first article is going to go through what kind of

what kinds of insurances you really need? And it is from dummies dot com because that's the first one that came up when I searched, and I, you know, I don't like the derogatory term, but they do have some good information. That's funny because I was excited when oh, yes, this is from dummies. That's perfect that it'll be so great to help to help with breaking down insurances. Man, you and Amy Adams really need to work on the self worth it. I'm not my word drama straight dumb piece.

But when it ms insurance, yeah, I'm going to meet articles from dummies dot com. So the first one as far as insurances that you need, not that Jen and I fully agree with this one, but but we'll get into it. So the first one listed as disability insurance, and so this would be an insurance that you would pay into regularly in the event that you suffered a

disability and needed help paying your bills. Right, So this is and the article makes an interesting point here that it is more likely for any one person to become disabled than to die. It sounds really morbid, but that's what we're talking about with insurance, right, We're talking worst case scenarios and making sure that we're covered for that. So it's saying that you do have a higher likelihood of becoming disabled at some point in your life, and so having some sort of backup to be able to

cover the expenses. We would argue, what about an emergency fund. I mean, you never know how along you'd be disabled for, but having an emergency fund for things like this that could cover you for up to six months while you figure out another route in life could be an alternative to this one. And there is so definitely don't like the idea of short term disability, which is only up to six months. There is long term which kicks in

at six months and continues to sixty five. But for that even more, I like figuring out a way to earn passive income. So what's something that you can assemble and sell that can be doing quasi passive making you income quasi passively and that just means that you can sell it. You don't have to be actively working to make money. So that's where I'm at, but not everybody

is of that mindset. So if you are are worried about that, that something that stresses you out and you don't want to start something that can make passive income, long term insurance is definitely something that you want to take a look at. Our next one is life insurance, and this is something that young people don't think about,

but it's really more affordable the younger you are. And life insurance is essentially just making sure that if you die in the next twenty thirty years that your loved ones are taking care of that they are not burdened by um having to take care of the kids, earn income, pay for your funeral, all that stuff. Most people recommend a twenty year term life insurance. Um, there is whole life,

but we'll get into that later. But term life really is super affordable, especially if you're healthy, and it can really make the difference. It's ours is for Travis is eighteen bucks a month and we don't notice it, but I know that if he is, you know, something happens to him, I won't have to worry about. You know, I can pay off the house, I can pay for his bills and then just have one thing taken off my plate while I grieve. So life insurance super important

to have. The younger you are and the healthier you aren't, the cheaper it's going to be. So don't wait on it. I think that's an important point that you're making, because I think for a lot of people, they don't think about life insurance until they're in their fifties sixties, starting to approach retirement age. But this really is something that we should be considering in our twenties, thirties, forties for the very reason that you're describing, Jen, and especially for

folks who who are dependent on one another. That's what it provides is the money for lost income for funeral expenses. Uh, you name it. It's a really important thing to consider. And also I think there's an unawareness of how inexpensive it can be. You just listed that off eighteen dollars a month for Travis. I think that there's just a lack of knowledge about that. So definitely look into this.

It's something that can again it's worst case scenario, but really important for us to be considering having, even in our younger years. So the next thing on the list is health insurance. I mean, we're not going through how to get the cheapest versions of insurance. That's that's another episode, but it is something that we need to be having across the board. If bearing the burden of paying for medical costs out of pocket, uh, that will lead to

financial ruin. So having some sort of health insurance that would be able to cover the costs. And this can even be a worst case scenario approach with insurance. You know, you can get an insurance that has higher deductible and make sure that you're emergency fund has your deductible saved in it for those worst case scenarios. But definitely having insurance to cover medical costs is a big one. Yeah,

let me put something into perspective for you. I was doing research for an article recently and I read this, and I actually had to double check the source. But more people, I think it was in two thousand seventeen or eighteen from the from the data, more people filed bankruptcy than got divorced in a single year. What. Yeah, And that number was verified by data from federal from federal data, and so and you hear, because you can't hide a divorce, but you can't hide a bankruptcy. And

most of those bankruptcies are due two medical expenses. So just medical debt piling up, that's super. That's a lot of them. Businesses are a lot, but for for common people, it's medical debt. And so we have to have health insurance, even if it's not required, it is a requirement in life UM nowadays with how expensive UM it is to be treated medically. The next one is long term care insurance. So this is something you start looking into at around

fifty to sixty five. So ideally you would get a term life like maybe a twenty year term life policy at thirty and that would run out at fifty. So by that time you're pretty good. UM. Maybe your kids are older, they can get jobs, or they're in college or something, and there is less financial responsibility. You've had years and years to build up your savings, so if you did pass away, it would not be such a

financial burden to the family. And this is when you start thinking about long term care insurance because it is the number one insurance that has taken advantage of more than auto, more than homeowners, more than any other type of insurance that is paid for. People who get long term care insurance use it because what We're all going to need some care when we're older, and hopefully we get there. You know your kid isn't going to do it.

You don't. You can't rely on them, that's for sure. Um. But yeah, so this is it's not an affordable policy. Like term life. Long term care insurance is pricey, but the amount you put into it is for sure you would pay more out of pocket for especially if you need to be in a nursing home, a full time nursing home, you will definitely pay more for that out of pocket than if you paid monthly for a long

term care policy. So consider that most policies will uh are good for three years of care, so just time that to when you will hopefully need it. The next on the list is auto insurance. This is just a given. You have to have auto insurance to drive your car on the road. You need to have it. Hopefully, if you are driving a car, you know this and you have insurance. We got pulled over one time after running a red light. Um Eric's color blind. That's another story.

I don't think that the end of story. End of story. But it was a new vehicle, and when you get a new vehicle you have ten days to to get the insurance and the proof of it in YadA YadA, and I don't know, time slipped away. We had insurance, but we didn't have the cards for it. My point is it was expensive. If we didn't have insurance, it was gonna be over a thousand dollars between paying the fine work fees. I don't even remember all that went into it. It was just going to be a heavy

chunk of change. We didn't have to pay it because we were able to prove that yes, actually we did have insurance, we just didn't have the proof of it. All that to say have have auto insurance, you have to have it, and then if you don't you're going to pay even more for not having it. So and now I think it's more common that we buy it and we forget to put the proof in our glove compartment or wallet. So do that. This is your reminder that if you haven't, you should. And the next one

is homeowners insurance. So if you own a home, you're definitely going to have homeowner's insurance. Actually, in Florida, if you've paid off your home, you don't have to have homeowners insurance. But again, you you want to have some insurance for your home. If it all falls down, let your entire investment just like burnt to a crisp. Alternatively, if you don't own a home, renters insurance might be a good idea for you, depending on the things you

keep in your home. Like I don't have anything fancy. I didn't have anything and fancy in my apartment. But if maybe you have recording equipment or things of value and you rent, then a renter's insurance policy is a good idea. I definitely recommend a renter's insurance policy. It's pretty much all Eric and I have done is is rentals of some sort, and actually a lot of times your landlord will make you have that. Uh. And this is another one that I think people just aren't aware

how inexpensive it is. I think we pay less than five hundred dollars a year for our renter's insurance, and that would cover anything even if you don't have valuables in your home, if you have to start over, that's still thousands of dollars just to get your kitchen equipment and clothing and furniture, or even if you're getting it from the thrift store. So I think it's a really good idea to have renters insurance if that's your situation.

Good point. So those are the six insurances that you really should consider, obviously not all at the same time, but throughout your journey. These are the ones that you want to focus on. And there are a lot of insurances that people talk about and it's hard to determine whether you actually need something or not. So we've got another article from policy Genius and it is the seven insurance policies you Don't need and it's from Insurance policy website.

So you know it's good. You can trust them. They're not going to tell you the ones. They're not going to try and sell you things that, well, you would expect them to sell you things that you don't need, but they're not. They're telling you point blank what you don't need, don't need an alternative, So I like that. So this first one listed is private Mortgage Insurance p m I for short, saying you don't you don't actually need this, of course, it's so what it is. It's

a it's a private mortgage insurance that UM. If a borrower is paying less than down payment, it's basically protecting the lender. So mortgage companies, so if you're paying less than a traditional down on your home, you might be asked to have a p m I, but they're recommending that you save up for a bigger down payment, or you put a down payment of ten to fifteen percent and borrow the money on the property sale price. So there are alternatives to this, and they're kind of saying

it doesn't even really protect you, it protects the lender. Yeah, we have p m I on our mortgage. It just worked out that it was better to do that than wait to buy home. And home prices in our area have risen almost thirteen percent year over year, so for us, it made sense to get in UM. And take that monthly p m I payment, But we are about to refinance to get that off. So that's an option if you believe the equity in your home has risen so much that you can get p m I off, then

you can refinance. But that's mostly going to be for real estate markets that are really booming. I wouldn't say the same thing for for a stagnant market. The next is credit card insurance. And I had actually never heard of this until I was reading this article, and I travel hack and use credit cards quite a bit. I

hadn't heard of it because it's basically a scam. Um. The what it is is the promise to pay off your credit card balance when you can't um, and then they like promise you these really low rates and it's like a dollar fifty for eight hundred dollars of outstanding credit card balance you have, And exactly what the article is saying, like, it's if you're thinking that it's too good to be true, you're right, and it's an absolute

scam for those prices. You should just pay off the card, like don't pay somebody to pay it off, or you just pay it off. So yeah, don't be scammed The next one is life insurance for children. So they're recommending this, not that you not do this. Really, what life insurance is intended to do is, as we mentioned earlier, pay for bills and expenses, make up for income lost, pay

for funeral expenses, that kind of a thing. The likelihood of you needing this for a child versus a senior or or even just an adult who's earning income is much lower. You you really don't need to have this

for your child. Um And it talks about being able to utilize an insurance policy as an investment for when the child goes to college, and that's just a salesman scam because you would only need you would only receive that if it's a life and a whole life policy, and even then you're not going to yield enough dividends to make it a good investment. You would be better off going the tried and true route of a five twenty nine college savings planned than trying to use life

insurance as an investment for your kid. Yeah, the salesperson gets a cut. I know this because my uncle is that he sells insurance, and my grandmother took out a policy on me to help him when he was starting out. And that was actually a policy that I cashed out when we were paying off debt um and all my life she had been paying this and I got about

just two grand back on it. And even still my um my uncle was like, please reconsider doing this, and I'm like, no, I'm getting a term life policy by so, yeah, it's really more for the person selling it, and they'll I'll try and like sugarcoat it and be like it's only you know, five extra bucks a month to have this sense of security, and uh, you're better off with

a five for your child. The next one is wedding insurance and uh it's approximately runs a hundred to five fifty per wedding and it's for if somebody calls off the wedding or you have to cancel it for some reason. And uh so that would just I mean, the alternative would be to make sure nobody's going to call off

the wedding before you get engaged. You want to get married, yeah, um, And then if you're planning a wedding in like a area that could you know, an outside venue that where it could rain, um, have a backup, then you don't have to cancel the wedding, So so many alternatives for this one. Don't don't waste hundreds of dollars ensuring your wedding. I will say, I'm going to be the unpopular opinion

on this one. If it really is only a hundred dollars and there is the likelihood of being able to get money back that you've invested into it, Like right there, they're they're talking about calling off the wedding, but there are a lot of other reasons that the date might not work an unexpected death of um, somebody in the family, or yeah, hurricane comes through or whatever, something like that.

If it is only a couple hundred dollars and and you're able to have somebody help you look through the policy and you're ensured to be repaid for if if you are spending thousands and thousands on your wedding, it it's not the worst idea. It's not like a hundred dollars is gonna really set you over the limit. So I'm a little bit on the fence with that one.

Like especially, yeah, if you're doing an outdoor wedding and it's costing a lot of money for specific outdoor things that yeah, I don't think it's the worst idea if that's how low it is. Yeah, but you can also check with your vendors and see what their policies are for if there's a um, you know, a hurricane or something. But yeah, if there's a death in the family and you just you know, I don't want to do it as the hundred dollars, it's not that bad. You just

have to see what it all covers. They do make a good point that vendors will have their own insurances that they have to take out, which is true, so yes, check with them on what theirs would cover and all that good stuff. Yeah. Next is extended warranties, and I think we've all kind of heard about that and we're all like, you know, we're not getting the extended warranties. But sometimes that this could become a difficult decision, Like

when you're getting a car. At the end, they will ask you all of these questions on the options you want, and even if you're getting a used car, they will just find questions to ask you and they will drag out the process. And that's in order to give you decision fatigue, because you'll think about the first five or ten questions but after that, your brain is done and you're kind of just going with with whatever they recommend

at that point. And that is a sales tactic. And so they'll do all of this and at the very end they'll tell you all the merits of extended warranties, and you'll second guess yourself and you'll say, Okay, maybe I do need the extended warranty, and you'll leave there, get a good night's sleep, and you'll regret buying it. I know this because I did this when I was I was probably about um, but no, this is what happened to me. And I woke up the next morning and I was like, idiot, Like what that was a

thousand bucks and what was the point of it? Um? But it was and that was the reason why that was the tactic they used on me. So know that when you are making a big purchase and they are doing that to you, that's what they're trying to get at. The next one on the list is mortgage life insurance. So it's a it is what it sounds like. It promises to pay off your mortgage in the event that you pass away. However, they are saying, why not just

get a good life insurance policy. It is one of your biggest expenses, and so if you've got a good life insurance policy, that should be enough to cover the cost of mortgage payments and other bills. So this could just be an added insurance that's not needed that other

insurance policies would cover. And the life insurance policy the term is more flexible, so you don't have to pay off the mortgage, where this one would require that even if the other spouses they're surviving, spouse has income to pay off mortgage and wants to maybe use it for something else, so you'd be much better off with regular life. The next one is unemployment insurance, and I hadn't really heard about this one either, So it's a pretty straightforward

type of coverage. It minimally covers your bills and expense is in the event you're out of work, and it can be handy in the event of a surprise layoff, but like I feel like almost every layoff is surprised, So like, how long are you going to be paying for this? And alternatively you could just save an emergency fund and when you if you think your job is really safe, then save three months. But if you notice signs of Okay, things are changing, I don't know. I

think my job is safe, but I don't know. Then up to six months just in case, or or have it six months to begin with similar concept to disability insurance. That yeah, maybe you could go alternative routes of high emergency funds, other streams of revenue, passive income, side hustles, those kinds of things and that need this kind of insurance. Mm hmm. Also recognize that there is unemployment that if you are in a dire situation, the government does give unemployment.

So there are some other alternatives to having that kind of insurance mm hmm. And then a last one, which is a bonus, is whole life insurance. So we mentioned that a little bit earlier. UM, but on paper, whole life insurance can sound like a good idea. UM. You buy a policy and you get lifetime coverage for you and your family, and your policy doubles as an interest bearing savings account. Whole life is also referred to as

permanent life insurance to or cash value. However, whole life isn't a great financial product and it doesn't offer a lot of financial protection. The amounts they pay out upon death are usually much lower than a term policy. It's much more expensive and the returns are not as good as an investment policy, our plan, you know, like we said, it's better to save in a five for your kids college than a whole life paul. See, they're usually returning

about probably around the same as bonds, maybe less. I haven't checked lately, um, But now with so many high yield savings accounts to there's really no reason some because some of them just yield that much. So really no, um, no reason to get a whole life policy unless you do not qualify for term. If you cannot get a term policy, it is better to have a whole life policy than nothing at all. And so there is a reason whole life insurance policies exist um as a as

a last resort. But they're not like a go to. You know what is a go to? Oh, this is never my last resort. It's the bit of the we. That's right. It's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you paid off your mortgage, Maybe your car died and you're happy to not have to pay that bill anymore. That bill buffalo bills, Bill Clinton, this is the bill of the week. Hey, Jenn and Jill,

this is Rebecca and I'm from Virginia. I'm just calling to let you know about my bill of the week. So um, for the past year, well, I guess year and a half, my husband and I have been paying rent and that is the bill of the week, and so so far it has been our biggest monthly bill, and it is soon going to be changing because we are moving and we're moving to a cheaper area that is also closer to where I work, and that's also a new job and changed himself. Yeah, exciting time. Who um.

But anyway, the person that we've been paying our bill too is none other than a man named Bill, and it was just too good. I couldn't help but let you know about it because soon we're moving and we're gonna be, you know, paying to someone that is not named Bill, and that's kind of a little bit sad to me, especially with all the bill of the week stuff. So anyway, I had to get it in there while that's still the case, and while that is still our bill. Anyway, I hope you guys have a great day. I love

the show. Huge fan I'm actually currently listening to it as I am moving up the old house and getting ready to go. Look forward to hearing more. Bye, Oh, I'm for back up. Thanks so much, double bill like paying bills to bill. That's got it. I mean, that's show money out of your pocket, but it's still has to feel amazing. I love it. Thanks so much for sharing that, And best wishes in your move and your new job and all the new things. So what's exciting

time to move to a less expensive area too. That's such a good, good update. I love that. If you want to share your bill of the week with us, visit Frugal Friends podcast dot um slash bill and leave us a speak pipe message or a Google voicemail and we want to hear about it. We are so excited. It is our favorite time of the week. I love bills, people, bills on bills, on bills, bills. I don't have to pass on stacks on stacks. But now it's time for

slening around, all right. So these are the insurances you need and don't need, But how do you save money on them? We've got four tips to save money on uh the insurances you do need. Jill pick it off bundle, bundle that home and auto. I know I sound like a commercial, but in all reality, you can save an average of for getting your insurance policies with one company.

So consider and even use that as a negotiation tool of Hey, I'm going to have this, this and this insurance through you all, what kind of deal can you give me? So good, so good. Regularly shop around for car insurance every we pay every six months, and that's another way that we save money. But before we pay, we always look at um different policies that we can get from different people, and then we'll come back to our policy holder and be like, hey, these are rates

that we could get elsewhere. What can you do for us? And and we will always get some money off if we always save money that way. And or sometimes they're like no, I can't do it, and then you just go somewhere else. But people really like the people that pay on time or every six months. Or you could raise your deductible too, if you're trying to lower your bill. We love to have full coverage, but that is our personal preference. Another way to save money on insurance is

to get and stay healthy. To save on life insurance. You know that this one doesn't sound like as fun, but you can pay less for your insurance if you are a healthy individual. Of course, some of that is outside of our control, but what is in your control? Do those things? Eat well, exercise UM, have regular checkups, avoid smoking, UM. Just give your body good things, get enough sleep. All these things will help for the things that are inside of your control. That will help you

save on life insurance. And the last one is to ask about discounts on homeowners insurance, so you can call your policy holder and ask what can I do to my house that will lower my policy. We had to get a new roof on and so we asked what are things that we could do roof wise to lower our policy And there were just these little straps we had to add before the roof was put on, and by doing out, we paid a little more UM, but we made our money back in like lowering our home

insurance bill by half. So in one year that little thing will be paid off and we'll be just saving money UM for the rest of the life of the roof. So ask about those discounts, especially if you plan on doing anything to the house. UM. See if you can do those things simultaneously. You'll save money on the installation or whatever and then also save money on your insurance. I like that idea for sharing that tip. Alright, y'all,

we're at the end of the episode. Thank you so much for listening, and we also want to thank you for your kind reviews. So one way of saying thank you was to read one like this one from iTunes and Stitcher. It's from acpod a frugal friends crush. Love the format. It feels like I have a couple of new fruit girlfriends. I have just binge listened through a bunch of episodes and I've really enjoyed them. The fake sponsors are great five stars. Thanks so much, ac pod Pod.

We also want to thank you for sharing these episodes on social media. So in addition to doing our monthly drawing for our friends who leave reviews, tag us in your shares on Facebook or Instagram and we will add you to our monthly drawing. So we're going to do for every five tags and reviews we get every month, We're giving away a ten dollar Amazon gift card for every five. So keep leaving us reviews on iTunes and Stitcher.

Send us a screenshot of those reviews at Frugal Friends podcast at gmail dot com and tag us on social media. You will be entered either way. Yes, thank you, thank you, thank you, and we will see you next week. Bye. Frugal Friends is produced, edited and mixed by Eric Cerien. I'm glad we kept this insurance peace short. No one wants to listen to Let's talk about insurance nobody over thirty seven minutes. I don't want to talk about insurance for over thirty seven That's all the content you need,

and you go have fun, right. I gotta go make me somehow coffee. Let's do it right. Bye bye bye