Dave Ramsey’s Financial Peace University has changed our life and the way we interact with our money. FPU week 6 was focused on insurance and why you need it, what types not to buy and where to find good insurance coverage.
If you don’t know, 7 weeks ago we started the 9 week class called Financial Peace University, organized by Dave Ramsey. We are taking the weekly class at a church in the neighboring town (the closest class we could find to our house). We have been following Dave on the radio for over a year now and although we consider ourselves sensible with money we were intrigued about his plan for becoming debt free. We are loving the class, the budgeting tools and the facts about money, debt and things like insurance we are learning. It’s an amazing experience and we would highly, highly recommend it. You can find our FPU updates here, or check DaveRamsey.com for information on the FPU class (it’s available online too) and to find a local FPU class in your area.
Back to FPU week 6.
FPU week 6
The role of insurance was the topic for week #6; during Dave’s video presentation he walked us through the 7 types of insurance that he says every adult needs. He suggested methods for figuring out how much insurance you need, what to look for when shopping for an insurance policy and what he says you should always avoid.
The 7 types of insurance:
- Auto insurance – he suggested raising your deductible to save money once you have a fully funded emergency fund in place
- Homeowner’s or renter’s insurance
- Health insurance – again, by raising your deductible you can often lower your monthly premium however you must be in a comfortable position so that if you were to have a health event your emergency fund could take care of the deductible.
- Disability insurance
- Long term care insurance (if you are 60 or over)
- Identity theft protection
- Life insurance – there are two types of life insurance and he strongly recommends you stay away from whole life or cash value policies.
We really learned a lot in week 6, we discovered areas we needed to adjust in our insurance portfolios and we have already been in touch with our auto and home insurance agent to look at making changes in both policies. We are looking into how much we will save if we increase our auto deductible to $1000 from $500 and what the savings will be if we pay for our policy in full instead of making monthly payment like we have done for the past 20 years of our life. We’ll report back to you about the results.
