I am not sure what factors are considered in pricing the coverage, but it can vary considerably. I have umbrella coverage with my HO carrier. My car insurance carrier quoted significantly higher premiums. You should be able to obtain a quote easily from whoever provides your HO and/or auto policies.
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From what Iāve seen on the Bogleheads forum, cost varies. We have our auto & home insured with the same company, and they also provide our umbrella. I think itās around $150-175/$1,000,000.
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Yes for some employer 401k funds, there can be issues with fees and other things.
With our last Prudential communication, our 401k is now under Empower Retirement LLC, which is the full service retirement business of Prudential Financial Inc. Empower is owned by parent company Great West Life and Annuity Insurance Company (GWLA). So ābusiness as usualā for us. DH and I manage the funds we want with the investment choices, and this investment is the source of the greatest volatility as equity investments that we look at the long term picture. āBuy and holdā. We spun off annuity purchases so we could lower our overall risk, and that has worked out well for us.
Some people have pensions that do what our annuities are doing for us.
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One has to be very careful on initial enrollment window on the time period AFTER one turns 65 - as far as when Medicare B can be effective. They have the time period before you turn 65 as the start of initial enrollment - and then indicate Medicare A at age 65 (free). I began Medicare B also at the month I turned 65. The initial enrollment ārulesā for the 3 months after one turns 65 - one has to follow these rules and these rules supersede āspecial enrollmentā. The chart is here ā it is not in the Medicare and You 2022 printed document!
https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
The hang up is when a spouse is carried by your insurance, but the spouseās initial enrollment āoverlapsā when one wanted to use special enrollment for that spouse. We had to pay for Medicare B a month earlier than it was needed, and actually the government hosed up DHās file that we finally had to have the local supervisor make repeated calls to get it straightened out - and got the card (electronically) the last week in Dec but effective Sept 1 ā DH was in ālimboā as he had no Medicare B card to show for care after our private insurance ended Sept 30th (he had Medicare A effective in June) ā we had paid for his supplement but any medical billing would have needed to be āsuspendedā until we had the card showing Medicare A and B.
DHās brotherās wife would have had this same situation, as her husband retired after she turned 65 but during her initial enrollment window. She thought she had it all taken care of (her local Medicare/SS office had properly handled their SS first) - and I told her to specifically call and indicate that she was needing to start Medicare B and she was in her initial enrollment window ā and she also had to overlap Medicare B with a month of their private insurance so she would have the continuous insurance coverage. This āruleā does hang up some people. It can be āfoundā on the web site. I believe the rule is in place due to the way SSA/Medicareās computer situation is done, but they donāt spell out that initial enrollment rules supersede special enrollment.
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Itās cheap as a % of overall insurance. We have a 5 million dollar umbrella. Always had one. Husbands cousin suggested it in our 30s. Said anyone who is young and making lots of $$ is an ideal person for someone to sue
( someone who wins a settlement can attach to your income for life!!). I think it costs $400 bucks a year or something.
The way she explained it is, if you have insurance they go after the insurance company who will handle it. Otherwise you have to hire your own attorney( $$) and worry if you lose they will get a lot of $. We pay for a couple of extra things on our insurance ( jewelry, art, etc) and this is one of the additions.
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Thank you for the info and the link. I will talk to the Medicare/SS folks to ensure I am doing everything right, but I want to be as prepared as possible before I contact them - so this info is helpful. My DH wonāt be eligible for Medicare for several years; I hope that makes things a little less complicated.
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You are correct that an IRA can be accessed by creditors whereas qualified plans such as a 401k cannot. One way to handled this might be to set up an LLC and then have it set up a qualified plan and roll the 401k into that. Iād check with an accountant to make sure this works. [I have a 401k in my company, but it actually employs me and I donāt know what requirements there might be beyond just having the corporate entity].
I also have an umbrella policy.
By design, the vast bulk of our assets other than our home are in qualified plans or a dynasty trust that affords a fair degree of protection against creditors.
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@Jolynne_Smyth - We added Umbella policy with Allstate (where we have auto and home insurance) when the kids started driving. I think it is about $600(?) annually for $2 million coverage. Not sure we still need that much now, but weāve kept it.
More info -
Umbrella Insurance: How It Works & What It Covers - NerdWallet.
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Out of the NerdWallet on what is covered and what is not under umbrella policy:
āIRAs arenāt, except for funds rolled over from an employer-sponsored account. However, IRA accounts and the equity you have in your home are often protected at least in part by state laws. Check your local laws before deciding how much umbrella insurance you need.ā
I wasnāt concerned about our IRA/Roth IRAs and not sure I really need to be - they are invested through TD Ameritrade in group accounts.
We have also carried umbrella insurance with having teenage drivers, but have kept it as we have assets - and when one has assets, there is always āexposureā to risk with an accident where we can be sued. The umbrella helps us SWAN and is not overly expensive.
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My mother was in an auto accident, and the guy in the car behind her died. He actually was killed by the impact of the car behind him - but her umbrella policy paid out over $800,000 (she had a $1M umbrella policy).
It would have been a legal nightmare w/o the umbrella policy. This way, it just got handled.
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I interesting,I donāt see anything about IRA from the link.
Wow, terrible story. And Thank goodness she had an umbrella policy.
Iām a big believer in life insurance (term only) and home owners insurance. Itās one of those things you hope you never need.
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Yes on the term insurance! Our SIL didnāt think he needed more on himself but DD knew it was important ā so we paid for the policy that she owns. Worth every penny for peace of mind. They have 3 young children.
Most people will not go w/o homeownerās insurance.
Have to have car insurance if one is a good citizen, as you break the law to not have it.
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Curious about umbrella insurance. One school of thought was to have enough insurance to cover your assets. But if someone is going to sue, wonāt they come after both (insurance limits and assets)?
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IMHO unless it is a very egregious situation where fault is very clearly with gross negligence, they might go after insurance limits and assets - but otherwise with insurance settlement, it would be where they quit at that.
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We recently changed our insurance to bundle home and car again, and added a $5MM umbrella liability policy. The umbrella policyās premium is less than $500/year (I donāt recall the exact amount) in addition to the other coverage premiums.
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Per Google search, ā According to the Insurance Information Institute, a $1 million umbrella policy typically costs $150 to $300 annually. However, the cost of insurance varies by location, along with factors such as your homeās age and construction, safety and security features and your age and claims history. Jan 5, 2022ā
I have sometimes wondered about whether having umbrella policy makes people more likely to sue you, but Iāve heard it recommended by a variety of retirement planning class instructors / financial planners.
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Funny in our state you can drive without car insurance. But you would have to have house insurance if you had a mortgage. So I guess laws in our state are opposite of yours.
Nice that you bought your DD life insurance. One of SIL didnāt have it when her kids were young and I worried a lot. If anything happened it would have been a disaster ( as it would for many people)
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I guess Iām getting a good deal on our umbrella insurance. But it might be since weāve have it for decades without a claim.
The other thing about lawsuits that I learned is, the insurance companies not only have lawyers on retainer but they have the type of lawyers who know exactly how to deflect claims lawsuits. And they can bring in multiple lawyers at no cost to you ( the insured).
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We have had an umbrella policy since we started driving preschool carpools. We have our HO and auto with the same co and the umbrella is on top of them and contingent on maintaining certain levels of coverage with them.
We insure our net worth. I donāt understand why this isnāt covered more in retirement planning.
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