- Common Financial Myths Single Women May Believe
- Your Money Mindset
- Critical Habits Single Women Need to Develop for Financial Independence
- Protecting Your Assets as a Single Woman
- Important Steps at Each Stage of Your Life
Insurance is an important part of your overall financial planning. It will ensure that you can maintain your income, your assets and keep you on track with your financial plan. Use our Insurance 101 section to learn more about how to shop for insurance, budget for it and maintain it. As a single woman it is important that you maintain at a minimum the following forms of insurance:
Health Insurance. All it takes is one sudden and significant medical emergency, illness or injury to wipe out all of your hard-earned savings. Even if you never had a serious need for medical care, without health insurance your out-of-pocket payments would skyrocket. Health insurance companies negotiate much lower payments for services and then typically only require you to either pay a standard co-payment or a much smaller percentage of the total cost they negotiated to pay the care provider. Pay attention to your need for health insurance. Without insurance an unexpected medical bill can wipe you out, and given that women tend to make less than men, it is likely to take you longer to recover financially.
Once you have health insurance, if you leave your job you can still maintain your health insurance coverage through the Consolidated Budget Reconciliation Act (“COBRA”). Under COBRA you can keep your current health insurance for up to 18 months, however you will be responsible for 100% of the cost of the policy. If your employer pays a portion, or the entire bill, for the coverage you should find out how much you would be responsible for if you were to leave your job. It’s important to maintain health insurance coverage during gaps in your employment not only to protect yourself physically and financially in the event of an accident or illness, but also to maintain what’s known as “credible coverage” that can help ensure you are eligible for coverage through your next employer’s plan.
Short-Term and Long-Term Disability. What would happen if you were in an accident, sustained an injury or became seriously ill? What if something prevented you from being able to continue working at your current income – either for a short-time or permanently? As a single woman you have to take every precaution to protect your income in the event that you are unable to work. Short-term and long-term disability insurance plans are important to consider for your financial and personal peace of mind. Some women consider this kind of coverage even more important than life insurance. As a single woman, the most valuable “asset” you have is probably your earning power, that is, your ability to make money to support yourself. If you are disabled in an accident or by an illness, and unable to work to support yourself, long- or even short term, what will you do? A partial or short-term disability can reduce what you earn or impair your ability to earn. A disability or illness that affects your ability to care for yourself long term, and is not covered by your health insurance puts you, a single person, who may have no one to help care for them, at even greater risk.
Homeowners/Renters Insurance. Your home and your belongings are probably your largest financial asset. So how do you protect them? If you own a home and have a mortgage (loan that you are paying off to own the home outright), then your lender will require that you carry home insurance. That’s because the lender technically owns the home while you are paying the loan off and lenders want to protect their investment from potential loss due to damage or destruction. Even if you don’t have a mortgage and you own your home outright, insuring your home is a smart choice to protect your largest asset (your home), your personal belongings, and yourself as a homeowner. If you are a renter, renter’s insurance protects the value of your personal belongings.
Car Insurance. While many states require car owners and drivers to maintain insurance even if it is not required in your state, it is wise to obtain it. If you were to get into a car accident and someone were injured – either in your car or another car – and you were not insured your assets (savings, investments and even future income) could be in jeopardy if the other injured person chose to sue you.