Grand Rounds: Insure Your Success
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Welcome to this session of grand rounds, a collection of posts I have discovered in the blogosphere and have found of interest and hope you do too.
This offering of Grand Rounds looks at articles from around the web that deal with all things insurance.
There is what I call a “danger zone” for early retirees when it comes to medical coverage.
It is the time you leave the workforce and subsidized health care and have to fend for yourself in the open market often paying a substantial amount of money to get family medical coverage.
The goal is therefore to survive financially during this treacherous time period until you hit the magic age of 65 when Medicare kicks in.
But are you free in clear once that happens?
Sadly you are not completely off the hook as this Kiplinger article addresses in, “7 Things Medicare Doesn’t Cover.”
The Health Savings Account (HSA) has long been a favorite of FIRE disciples.
Those who champion the HSA speak of triple tax benefit (contributions, gains, and qualified withdrawals are exempt from taxation).
I too have used the HSA as my “Stealth IRA” by contributing the maximum allowed each year and then cash flowing any medical expenses out of pocket.
But is this the right move?
Biglaw Investor addresses this very issue in, “HSA: Pay for Expenses Now or Later?”
Yet another word of warning about the HSA has nothing to do with financial ramifications but rather because an HSA can potentially put your health in jeopardy.
I certainly was.
Our Next Life explains this risk in, “The Problem With The HSA (Health Savings Account) Isn’t The HSA.”
One of the benefits of getting older is that you are hopefully accumulating wealth as you age.
There exists an inverse correlation between your wealth and your ideal life insurance coverage.
The wealthier you are, the less insurance coverage you need for your dependents.
Unfortunately this means that when you need the highest coverage it also happens to be when you are just starting out with little to your name, making those premium payments sting even more.
Dr. Linus, of Dads Making Cents, has a method I wish I had known back in the day to help minimize the overall cost of life insurance in, “How To Build A Life Insurance Ladder.”
It could not possibly happen to me.
I am sure many young residents are out there wondering why should they spend any of their money on something such as disability insurance.
It is however at this important stage of your career that you need disability insurance the most.
All those years of training has built up sizable human capital that has yet to be tapped into to build financial capital.
If something were to happen to you at this stage of your career and you were no longer able to practice medicine the only thing that you can be assured of is that those medical student loans will still be there.
Even those who have disability insurance may not realize that they have the wrong policy in place and not be adequately covered.
Dr. Cory Fawcett of Prescription For Financial Success shares one tragic tale of a physician whose career got cut short early in, “Insurance Struggles With My Career Ending Disability.”
[P.S. If you are inspired by this article to get disability insurance if you don’t have a policy (and if that’s the case I do hope you do) or unsure if you are adequately covered by your current policy, please consider utilizing one of the trustworthy sponsors of this site (and tell them XRAYVSN sent you).]
Hope you enjoyed the reading material.
Have a great rest of the week.
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Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
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