Are You Financially Protected?

Are You Financially Protected?Whenever I have the opportunity to speak to groups or individuals on the subject of finance, I share two key scriptures of financial warning so that I can bring safeguards to those who will hear. These two scriptures call us not to be naïve, and to avoid financial mistakes that can cripple.

The first scripture is: “A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences” (Proverbs 22:3). In the Middle Ages, before people would build a castle or a community, they would first build the moat or wall to protect them. In our present times, we build a financial wall by protecting ourselves with a paper moat called insurance. Insurance is used to provide where a potential loss or liability would be excessive and unaffordable. This is especially true when we have caused another’s loss. It is critical that we make every effort to have certain insurances in force to protect ourselves and others.

Health Insurance
Health insurance can be expensive and difficult to acquire at times, but we need to be diligent to do our research and secure adequate coverage. The number-one cause of bankruptcy today is medical bills (number two is credit cards). In 2008, I was diagnosed with cancer and went through surgery, chemo and multiple ongoing diagnostic exams and tests. I still have follow-up assessment and checkups. The bills were over $100,000 and, coupled with my inability to work for a season, would have been crippling without adequate health insurance coverage. Unfortunately, getting good (and potentially life saving) health care is now dependent upon having insurance coverage, so be diligent and make every effort to secure the coverage you need. Look into Florida Healthy Kids for low income parents, Medishare (a low cost sharing program for Christians), and all of the governmental, state and public programs that are available. Choosing to go without health insurance is imprudent due to the high cost of medical services.

Auto Liability Insurance
Auto liability insurance covers the most liable activity we do; driving a two ton vehicle 70 mph in the rain two feet away from another person. If you happen to get into an accident in which you are at fault, and you hurt someone (or if you are hurt by someone else), you will want adequate coverage in place to ensure that everyone involved can be taken care of and compensated fairly. Imagine if you caused an accident that disabled someone else who was the sole provider for his or her family? I had a client who was driving down a wet road one day and was hit by another car, causing his car to slide off the road and hit a worker, killing him. My client’s legal bills alone were $70,000. Thankfully, he had recently obtained an umbrella policy for $1 million in liability coverage, so not only were my client’s bills covered, but the insurance company rightly compensated the family of the worker who had been killed. As you can see, not having adequate liability insurance on your car is not only imprudent, but places you at substantial financial risk.

Disability Income Insurance
Disability income insurance pays a portion of your income to you if you are sick or hurt and unable to work. Most people have plenty of life insurance, but few have disability coverage; even though the odds are much greater that you will have a disability than die before age 65. Statistically speaking, if you are 32 years old, you are 12 times more likely to become disabled than to die by age 65. Your ability to earn wages is your biggest asset. Many employers offer group plans that you can sign up for. Make sure you opt for the long term disability that pays until you are at least age 65. You can also purchase a policy privately if your employer has no group plan. It is certainly prudent to plan to provide for your family in the event of your death with a life insurance policy, but it is imprudent to not bolster that protection with long term disability income insurance to ensure they will also be provided for if you become disabled.

The second scripture that I always share is, “Know the state of your flocks, and put your heart into caring for your herds, for riches don’t last forever” (Proverbs 27:23-24). Most of my financial planning is helping people discover what they have and what they do not have ; what they know and are aware of, and what they are unaware of. Do you know what the percent rate on your credit card balance is and how to lower it? Have you homesteaded your primary residence? What are you liability limits on your car insurance policy, and what does the uninsured motorist policy option cover? How is your 401k invested, and it is diversified? What are the fees your bank is charging you? Should you refinance your mortgage? What cable, phone, cell phone and internet charges can you save on? How much are your expenses per month compared to your net income? You get the idea. We need to know the condition of what we manage.

We are not expected to know everything, but we are responsible as stewards to manage well. So, get sound counsel, get understanding and get knowledge; these will be a crown of wisdom to your financial management.

Jeff Masters is an Elder at Coral Ridge Presbyterian Church and has 20 years experience in Financial Counseling and Professional Financial Planning. He has a Master’s Degree in Administration, is certified with Crown Financial Ministries, and is a qualified advisor with Kingdom Advisors. He has facilitated Dave Ramsey’s Financial Peace University, and has taught a Biblically Based Stewardship classes over the last 15 years. Jeff and his wife, Paula, have 5 daughters and 5 grandchildren. Jeff has a heart to help others handle their finances using prudent biblical principles.

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