Season 2, Episode 15: What Kind of Insurance Do I Need?

Trying as hard as we can to make life insurance, disability insurance and umbrella policies as unboring as they can possibly be. We said trying.

How do you know what kind of insurance you need, when you need it and how much you should pay for it? We have no idea!

So that’s why we invited certified financial planner Kacie Swartz back on the podcast to explain to us how to figure it all out. What does “term” mean? Should a young person get life insurance?? And are we supposed to get life insurance for our kids???

Kacie explains all of this, and more. And warns us that ignoring personal insurance can screw you or your loved ones if tragedy strikes.

So, women on the verge of a financial breakthrough really have to figure this insurance thing out to build out their financial futures, no matter how boring it sounds. We’ll help talk it through - it won’t be so bad. Promise.

Oh! And do you have a passive income story? A success? A failure? Tell us about it in a voice memo and e-mail it to: womenonthevergepodcast@gmail.com

Ask us your dumb investing and finance questions for Season 2 on our Ask Us page!

We have the social medias!! Here’s our Instagram (Thank you, Gwen!) and Facebook and LinkedIn.

This episode was edited by our co-producer Kelly West. Music by Bad Bad Hats and Devmo.

Transcript for Season 2, Episode 15: What kind of insurance do I need?

Caitlin Welcome to Women on the Verge of a Financial Breakthrough, a podcast where we're figuring out finance. One dumb question at a time. I'm the dummy. Caitlin Meredith, a coach and mediator based in the Bay Area.

Sara And I'm Sara Glakas. I'm an investor advisor and founder of Black Barn Financial and the Austin Women's Investing Group, which can be found on Meetup and Facebook.

Caitlin Hey, before we start, I just wanted to remind everyone that you can connect with us on Instagram at Women on the Verge podcast or Facebook and LinkedIn. We would love to hear from you and please share with your friends. Thanks.

Caitlin Today we're welcoming back pod favorite Kacie Schwartz from Black Barn Financial back for more to talk about one of the most boring financial topics I can think of. Do you guys agree?

Kacie Absolutely.

Sara This is probably it.

Caitlin But it's so important.

Caitlin And I have a couple of stories of friends, stories about why this. But anyway, spoiler alert, insurance, just the war. It's like bad all around because A, it's expensive. B, you have no idea which fucking one to get. See? The best case scenario is you never need it. So you're paying all this money for something you're never actually going to get the benefit of. So it's very hard. But of course, that worst case scenario is what we're doing it for. Far right And sometimes legally, like for my car loan, I had to have it. So Kacie's going to tell us what a normal person needs to think about in terms of insurance, right, Kacie? Is that a fair description?

Kacie Yes, that's exactly what I'm here for.

Caitlin A few.

Caitlin Okay. And Kacie, why? I'm just curious, like I totally believe you. But one of the problems Sara and I had doing an episode on insurance is because the people that know the most about insurance sell insurance. And so, of course, they think you should get the kind of insurance. So it's been really hard for us to even think of somebody who can talk about it in like an unbiased way. And I have friends that are insurance salespeople and they are fine people that are really looking out for the best. But I also think they they see the worst case scenario often. And so they're a little biased by not just their financial incentive to sell you something, but they hear the horror stories all the time, and so they're influenced by that. So I'm curious what this again, I'm coming off as hostile. But like Kacie, tell me about how you've learned about insurance and why you feel like you've been able to advise your clients about, like what makes sense for them not being an insurance professional?

Kacie Yeah, the starting point for me on insurance is like. Almost the dictionary word of what is insurance, right? Well, it's risk mitigation or risk management. And so, therefore, it is a service that I personally am willing to pay for, and I advise folks to pay for it as well so that they can cross off the worst case scenarios. Knock on wood piece, all of this is like it's hard to talk about because it does make me feel very like superstitious.

Caitlin So like if you're a little bit if you're a little bit woo woo about any of this, like just keep your wood nearby because we're all.

Sara Everybody's like their sage. I know.

Kacie Yeah. We're all tiptoeing past the graveyard here. But the point is that, like, by having all of these different fail safes in place, my goal is to help people feel more empowered, to take on risk in other places or to be more assertive and more aggressive in their career, in their goal for financial independence, in their investments in general, in real estate, like whatever they're up to. If we can cross off something that's as like boring and plain vanilla as Did you buy an umbrella policy?

Caitlin Yeah.

Kacie Then like, you know, sky's the limit, right?

Caitlin Okay. Okay, that makes sense. So that if you shore up, you're just like, having an emergency savings account, all that, then you free up your creativity and your ambition to take other risks that can make you more money down the line. You're investing in your financial future because you don't have to worry as much about like that worst case scenario. And where will the money come to cover me and or my family during that? Okay.

Caitlin Yeah.

Kacie Yeah. And like a really basic analogy would be if you are writing your bicycle, it's like your big commitment is I'm going to ride my bicycle to work this year. I'm going to learn how to really do that. Well, it would be prudent to take one of those classes where you learn how to change the tires and like carry an extra tube with you, because if that all falls apart, you're Uber, right. So my point being that by having just like these basics in place and when I talk about insurance again, I do not sell insurance. So I am not like the world's most authoritative on the extremely niche cases where some fancy doodle policy really worked. I like a bread and butter approach to insurance, so to me, like just having some basics in place gives you that that confidence, hopefully.

Caitlin Yeah, and that's what we're after. Like obviously if people have really specific coin collections Or high end hairless cats or something like that, like that's going to be a very different like niche thing as you're saying. But like the normal person. I also think like over the arc of our lives, we have different insurance needs and we're not like interrupted when we're turning 40 and been like, Hey, now you should think about this kind of insurance. And so it's like they all just kind of loom up there. Which ones am I supposed to have and when? And so the time of life, if you have kids, if you don't have kids, if you're married, if you're not married, all that stuff makes it easy just to be a conversation we want to avoid. And that saves us money in the short time anyway. So we have a lot of incentive to not think about it. So you're here to be the grownup in the room to tell us.

Kacie Happy to do it.

Caitlin Doing okay. Sara, do you have any preamble you wanted to talk about? Sure. Does it come up with your clients when insurance?

Sara Yeah, all the time. And. And, like Kacie, I like to talk about things. I understand, Right? So when talking about life insurance, like, okay, well, what happens to your family if you die or if your spouse dies, Right. What happens kind of in these worst case scenarios, that idea of a simple insurance policy that answers that question very succinctly, I think is where Kacie and I both start from.

Caitlin Okay. Yeah.

Caitlin Okay, well, let her rip. Kacie, I'm just. I'm already feeling anxious that you're going to give me information that's like, sounds great on this episode. And then I would actually talk to an insurance person and the like. But you should really get this ad on. And did you know that 40% of the people that don't like I'm already feel like I'm getting absorbed.

Caitlin Not by you.

Caitlin But like the future. So having a grounding in what's actually important so I can keep my eyes on the prize, what I'm like actually pursuing.

Caitlin It is I have this make.

Kacie Believe salesman doesn't really.

Caitlin Feel great.

Kacie There's a lot of pressure for me. Caitlin Thank you. Okay, so yeah, so the starting point, I will just start with something that probably everybody already knows. But, you know, Sara and I are by far in financial. We are fee only fiduciary financial planners and investment managers. We don't sell insurance, we don't sell annuities, we don't sell any of those things. So we should be in a perfect world because we are fiduciary level advisors. We should be able to give advice to people that is completely agnostic as to which types of insurance and what brand of insurance and all of that kind of information. But the most important thing to me about insurance is who depends on that income stream or who is who is hurt if you don't have this insurance or who benefits if you do have this insurance. Right. And this comes back to that time of life conversation, Caitlin, that you were kind of talking about. So, for example, if you are a 23 year old worker who works at a W-2 style paycheck kind of job with no kids renting an apartment, you know, no dependents, right? What kind of insurance would that person need? Well, you probably don't need life insurance because no one is depending on your income if you passed away.

Caitlin Yeah. Okay.

Kacie Do you need disability insurance? You're 23 years old. God forbid you are injured at 25 and you can never work again. And you're you're reliant on the Social Security disability insurance. Your life is extremely different than it would have been if you had continued to earn income. Right. So that is like where those different streams of insurance work into conversations and then like long term care insurance. These are like to me the main ones for a person rather than for property casualty. So those like three different things are kind of different times of life, right? And long term care insurance is essentially the idea that you're going to pay a premium and in exchange for that annual fee, the insurance company is going to have your back if you ever need home assistance. And I believe it's something like two out of six of the activities for daily living. There's these there's these really well defined activities, basically like dressing yourself, feeding yourself, going to the restroom, etc., etc., that those are the metrics that they use to say, if you can't meet these, then you qualify, Right? Okay. So you might still live at home and you can get some help. You can get somebody to come in and help you, or you may be in a situation where you are moving into a facility and you may even be in a situation where you're no longer cognizant. Right. Right. And someone else is making all those decisions for you, which is, you know, not fun to look at, which is why we're all knocking on wood again.

Caitlin Knock, knock, knock like that.

Caitlin You're never going to grow old.

Caitlin I don't know that wood is going to grow.

Kacie I'm never going to grow old. I am going to be this level of like 42 year old healthy, which by the way, is not like super healthy. It's just like gets the job done healthy until I quietly pass away at 86 years old.

Caitlin In your sleep.

Caitlin Yeah.

Caitlin I have abilities intact.

Kacie Absolutely. Either asleep or like I never saw it coming when, you know, whatever happens happens.

Caitlin Okay, That's the goal. That's the goal. Perfect. Hi.

Caitlin Okay. Tell me which one you want to talk about first, because I have a lot of problems with each.

Caitlin Of those categories. I know, right?

Kacie So let's just kind of take it chronologically, okay? Like, let's say you are a person who doesn't have dependents. You don't have children or as far as right. Or those people are financially independent. They don't need your income. Then for a lot of people like you may not need personal insurance like other than like life insurance or disability insurance or long term care insurance, because those things may not be coming up for you, long term care insurance also. And again, insurance agents might have like a varying opinion on how young you should get that right. But a lot of them, I wouldn't recommend getting that kind of insurance at a young age unless you have known issues in your family or you have genetic testing that shows you're at risk because like, that's a lot of money to be spending. When those actuarial results say that it's not likely to occur until after 60, 70, 80. Like, you don't want to spend 30 years paying that premium.

Caitlin Right. Well, and here's what I imagine in my imaginary conflict with an insurance salesperson on this matter is just like with dog insurance or pet insurance, Like if you get it when the thing is that puppy, it's cheap ish. And if you try to get it when they're three or four, it's much more expensive monthly fee. And so the incentive then it sounds cheaper to start earlier because like, oh, that's only 35 bucks a month. And if I start later, it could be 70 or even more a month. But like, that's when I just feel overwhelmed. Like, So which one is right? Do you start with the cheaper one or you wait till later, but then you're paying even more?

Kacie Yeah, exactly. But also there's an element of how much can you personally afford to pay for. So if it's a dog situation and and I never expected to learn how the doggie ophthalmologist works, but I did. And I spent more than $1,000 on it. Not, not thrilled that I learned that lesson. But you know, like if you have a certain breaking point with your pet, you know, okay, am I going to spend $100,000 on my dog or am I going to spend like less and like that might be subjective to your own income, your own stage of life, how committed you are to Leonard Cohen? Schwartz the sweetest little puppy, and his asleep in front of me.

Caitlin Can you still do night driving or is that off the table?

Kacie Oh yeah. That's off the table for a while. For for a little poor little Leonard Cohen, sort of. At this point, he's like, lucky to to be able to, like, find his way through the doggy door. But, you know, those are the kind of things that translate into your insurance needs. Can you afford to self-pay? Yeah. So, for example, you know, in a situation where there's a two person household and one person has a baller job and the other person has a normal income level job, does the normal income level person need as much life insurance? Probably not, because, you know, the one with a big salary is probably going to be okay. Yeah. If the other person's passed on or, you know, variations on that same thing. Right. The same thing with your disability insurance if you have coverage through work. And most people who work in a big company as they do so you might have 60% of your base salary as your disability insurance at work. Okay. But your in tech sales and your base salary is $2,000 a month and your actual compensation is coming from your huge.

Caitlin Commissions.

Kacie From work. Right? Okay. Yeah. So now you're going to get 60% of that base salary after a 90 day exclusion. So like, is that really going to make your ends meet? Plus the new medical expenses you have now? Probably not. Right. So you probably need to add on to that. That's why it's very subjective and it's very personal. It's all very tailored to the individual. But the main things are like, where can you find the savings? What do you actually need at this life stage and at what age should you do the match? Like the decision tree of should I get more? And also, you know, there are insurance brokers out there that you can reach out to them and they can just give you the facts and you can do a lot of online quotes as well just to get the facts. Like what's an estimate? How much could this cost without actually applying all the way for insurance?

Caitlin Okay.

Sara Well, case, can I just. A follow up question. So on life insurance specifically. Right. Because I think that, yes, like the point is well taken that everybody's situation is different. But let's if you're talking to someone and trying to rule of thumb it like if you had to choose a rule of thumb. Where do you think people. Should start like as the a good an estimate for maybe how much like on a term life insurance policy you would do you have a rule with them.

Caitlin Life insurance.

Sara And can you define term life insurance.

Kacie Okay yeah so this is one of those those things that comes up, right. Life insurance, in my opinion, is risk mitigation. Risk management. So therefore, my favorite type of life insurance is term life insurance, because the word term means how many years is it good for? Without changing the premium, not changing the benefits, necessarily changing the amount that you're paying. So, for example, a few years ago before we had kids, my husband and I got life insurance and we chose a 20 year term, which means for the 20 years from the day that we got the policy, we knew that the premiums were set. So I have to pay $600 a year. He has to pay $700 a year for the next 20 years. And if we die, it's a very simple transaction. And Transamerica is going to pay my estate or my named beneficiary and my documents the face value of my policy. Okay. So in our situation, I have $500,000 of coverage and he has $750,000 of coverage. Because when we got the underwriting back, like the medical information, Mr. Superhuman Marathon Man, like literally he runs marathons. I was like, he was quoted as extra super healthy, which meant that his insurance was cheaper. So he got more for the amount that we had personally as a family budgeted.

Caitlin Okay.

Kacie And I miss sedentary desk job, chubby lady. I was like, Thank you for insuring me. I am thrilled. I will take it.

Caitlin As an honor and a privilege. Oh, yes, exactly.

Kacie And they do. I mean, they have these different levels of ratings, Right. And what they are judging is like it's absolutely fascinating from a sociological standpoint, like the sample set, how many 35 year old chubby ladies died within the 20 year frame?

Caitlin This is like an actuarial. This is what they mean.

Kacie This is the actuary does. Yeah, this is the science, the actuarial science. It's so interesting. I absolutely love it. Like, I want to get actuarial scientist drunk and ask them questions.

Caitlin I only know about it from that movie with Ben Stiller and Jennifer or Jennifer Aniston. He was an along came Polly. He was an actual and a very risk averse actuary.

Kacie Well, Fight Club isn't Edward Norton, an insurance analyst of some sort that runs the actuarial numbers.

Caitlin Yeah, but we can't talk about it. We can't talk about it.

Caitlin So we will.

Kacie That is the first rule.

Caitlin Don't delete.

Kacie But the first thing that never happened. But back to, you know, just like the life insurance itself. I know. And I've got a clock ticking. Right. And so we bought those policies because we were trying to have kids. It turns out it's really hard for chubby 35 year olds to have kids. We didn't have kids for like three or four years. And I was like, shit, we better have kids or else my policy's going to run out before they get to college.

Caitlin Because you timed it so that if one of you were to die in the next 20 years, that would be the hardest time for the other spouse to compensate for that missing income and still raise the kids and be in a house.

Kacie Etc.. That's exactly it. Yeah. If only one of us is working, can we pay the mortgage? Can we pay the child care? Can we pay for, you know, whoever is doing the work of that second parent in our situation? Right. And so that's why we bought the policies. And that's why there, you know, again, the subjective level of how much insurance people have, we are pretty cheap policies because we just wanted to get rid of the mortgage.

Caitlin I gotcha.

Kacie Okay. And you figured that the other person could work and could pay for everything else. But we were both like, the deal breaker would be the mortgage. Okay, So that's that's that was our mental like math on that.

Caitlin I have to say, a friend of mine, a good friend from childhood, she has three children and she and her husband were young and healthy, but their third child had special needs and they were going on their ten year wedding anniversary to Paris. First time they had been away from all three kids and their child. Most will need lifetime care. And so they had put they're the the sort of guardians for all three children were my friends, one of my friend's brothers. And so they. Knew that they if that were to happen, if they were to die, that the person taking on the care it be a lifelong financial expense, an investment in lifelong care for them. So they decided before getting on the plane to max the life insurance policy for her husband, who was the the the larger breadwinner. And they went to Paris, had a great time, came back and just sort of forgot to undo it, to like, put it down. And a year later, he died unexpectedly healthy playing pickup basketball. But she was that So they had envisioned it as her brother, as the recipient, the beneficiary of it. But now it's been her and it has allowed her to do that, to stay in the house, to have a life with her three kids that compensated for it. And so it you know, I had heard about life insurance my whole life and just been like.

Caitlin Oh, my God, Like, I can barely keep my eyes open for the whole two word phrase.

Caitlin And after hearing that story and she she said, like the week after, all of her neighbors went to her insurance agent were like, up, you know, let's let's let's do this seriously now. So it really opened my eyes, especially since so many women take on child rearing responsibilities when their kids are little. Our incomes are not the same as our spouses. In many cases, it's different for everybody. And that that loss like plummets them into uncharted territory where, like, they have to leave their house soon and the kids lives are in theirs. You know, in addition to mourning and grieving, this terrible loss have like a financial burden that is beyond what one person who has been in the primarily in this case, my friend, is a nurse practitioner. So she was working too. But her income was nothing to compare it to her husband, who was a lawyer anyway. So it really drove it home. So after that I was like calling all my friends, especially with multiple kids, being like, this isn't optional. Like, this is really it's Yeah.

Kacie How many times have you gone into the convenience store and you see those jars like the old pickle jar that somebody has put pictures of the loved one on the outside and it says, Please contribute to this person who passed away and didn't leave any life insurance. Yeah. And yeah. And then their family is having the worst experience of their lives because their loved one is gone, plus their income is gone. Right. So I totally agree. And I think that's such a good point, too, about the women who sometimes and again, I'm kind of generalizing, but it is a generalization that women give up our careers to really.

Caitlin Statistically more likely the pandemic really reinforce those trends.

Kacie Yeah. So let's say that in your situation, kind of like what I'm describing with myself, where I had the smaller policy, let's say I had taken those years off with the kids. Five or six years later I get back into work, I'm killing it. My income's huge. I never reset that policy. But of course we've had lifestyle creep, right? So I think you have a really good point there about revisiting the life insurance as your income significantly changes and lifestyle changes.

Caitlin So you have a nicer house with a bigger mortgage. You know, everybody does.

Kacie I mean, look at what inflation has done in the last couple of years, right? Yeah, I saw a tick tock or a meme or something where somebody was talking about she knew that diapers were expensive, she knew college was expensive, and then she, like, drops her receipt. She was like, I did not know that berries. We're going to be the.

Caitlin Thing that worries me. Oh, my God. I remember I used to.

Caitlin Buy organic blueberries and my daughter would poop them out whole.

Caitlin And I'd be like, Well, let's give it another try. This was super sweet.

Kacie I've done my children two boxes of raspberries this morning, and I resented every.

Caitlin Morsel because.

Kacie I was like, You little hyenas are eating.

Caitlin So much money. Gold. Okay, but.

Caitlin There's this other piece of it, too, which is I think that a lot of couples, they have kids and getting like a will an estate plan is like on the list forever. We should do that. We're grownups now and life insurance gets paired with it. And they're really two different things. And it sounds like from what you're saying is like the life insurance, just do that today. Hem and haw about the will and estate plan. Okay. Like you should do that also. But like, don't bundle them because neither will get done and will be delayed a really long time. But if you're going to do one thing today, life insurance and that situation.

Kacie Is like.

Caitlin Doable in a relatively quick amount of time. And has will have the biggest impact immediately after our death.

Kacie Yeah. And so let's like kind of walk through the logistics, too, because I feel like the unknown unknowns are one of those things that, yeah, that puts a pause in the plan. So let's say you want life insurance, okay? And you're like, I'm just going to get a $500,000 policy. I'm going to get $1,000,000 policy, I'm going to get a $3 million policy, whatever. They'll insure you for whatever you think you need. But the short the first step is you reach out to the insurance agent or the insurance broker and you say, I want this much coverage, and then they send you a big fat application. You just fill it in. It's like going to the doctor's office and then they put it through. And you have to be very honest about the medicines you take because they're going to check your medical records and you fill out the paperwork. They run it through their their math. Then they send a nurse to your house who takes your blood and checks your weight and your blood pressure. And then after that underwriting is done, boom, You've got a policy like it shouldn't be rocket science. It's not that bad. Yeah. And like all of the things are my sister. Was like, I don't want to get life insurance because I'm going to lose £20. And I was like, Babe, come on. Are you going to die without life insurance? Because you wouldn't lose the last £20? Can I have someone give you the the estimate before you go through underwriting to tell you the price difference at, you know, weight A, weight B, -£20? Like, is Naomi different? Is that different?

Caitlin Well, and it's like waiting to get new pants and, you know, like do clothes or.

Kacie One of those lives that your entire family is screwed for the rest of their lives because you didn't buy new pants. Yes.

Caitlin Yeah. Okay.

Caitlin But let's walk through a little bit about the math. You said like you can do it for as much as you want. It sounds like with you and your husband, you figured out how much is the mortgage, you know, how much would paying off the mortgage. So that was a very set financial target. We know with between 5 to $700000, we could pay off the mortgage. And that's the that's the math assignment for figure eight. Like because I can imagine just throwing up.

Caitlin I don't know how much I need.

Sara We were a little bit different on that where like my rule of thumb is something like ten years of income.

Kacie Well, that's what I was going to say. This comes back to that time value of money. And I was going to say, Sara, I'm sure you've talked about it many a time on the podcast, right?

Sara Oh, yeah.

Kacie Oh, yeah, exactly. But also, Caitlin, the other things you were saying about like estate planning and guardianship and whatever, like this is a bit of a commercial for having a fee only advisor is that you have somebody you can trust to be a fiduciary, to be in your corner who's going to shepherd you through these things that are erm. Yeah, they're important but they're not urgent. Yes. I mean it's like do you need life insurance or do you need guardianship for your minor child. Because if you don't have minors, if you don't have guardianship for that minor child, is the family going to go nuts about who is raising the child? But like, life insurance actually might be more important. You might be right, because if one of you passes away, well, then the whole family is out of luck. Right. Right.

Caitlin And those are things that happen right away. Not being able to make a mortgage payment in two months is a big deal.

Kacie A huge deal.

Caitlin Yeah. Yeah. Okay. So, Sara, you did your calculation based on income. So like, whoever the person who was potentially dead, what would their income have been for the next ten years? X times ten. And that's how much we want to get. When you get a life insurance pay, is that taxable income?

Sara No, it's tax free. If they just cut you a check for the death benefit.

Caitlin So that's like.

Kacie Yeah, as long as you paid for it with after tax money. Which is what we did.

Sara Yeah, which is what we're talking about here. Like your. Your personal life insurance policy. You pay for it.

Caitlin You're not going wherever a break for it. And in real time when you're paying it. Oh, my God. But that's even a bigger endorsement for finding a fee only adviser now, because you imagine you're in, like the fog of grief. You have kids, you're managing everything else, and then you get this like, quote unquote, windfall. Like it goes in your checking. Like you are the least capable point to make such big financial decisions to stop someone who you already know to be like, Can you just hold this for a second till I can make some decisions about it?

Kacie And the grief counselors all say, like, don't make major decisions.

Caitlin Exactly. Right. And here's $10 million.

Kacie You've got to pay the bills. And yeah, like like Sara was saying, is it ten years of income? It depends on how old you are, how many years, where you going to work. And so you do that time value of money calculation to say what is the lost pool of income that we need to replicate with this this windfall between now and like the 20 year mark on a 20 year policy, for example? Does it or does it not include college expenses? Does it or does it not include paying off the mortgage like I don't you shouldn't pay off the mortgage if you've got a 2% rate. But, you know, nowadays these these interest rates are six or 7%. Maybe you would like. There's so many variables. Yeah, it definitely lends itself to having a wingman because it's complicated and it's extremely personal.

Caitlin Well, and the other constraint is how much can you afford each month right now? Like, so, you know, you want $10 million. But if really, in order to meet your other financial goals for retirement, for your emergency savings, like you really only have 600 a year or whatever to give to it, then you have to start there. And for a lot of people that are, you know, in the middle class, like that is the point. It doesn't matter. You know, the the fantasy of the, you know, getting all this money that how much can we actually afford to pay into it right now without sacrificing our other also important goals if we don't die early?

Kacie Yeah, and that's another reason that we're talking so much about term insurance, first of all. First of all, I like it best out of the the major types of insurance because it is simple and it's transactional, but also it's super cheap like you can get if you're a 28 year old parent, like you can get $1,000,000 coverage pretty cheap, like maybe 400 bucks a year. It's not bad. Yeah, you know, we talk about this 10 million up policy, but you also can be over insured. Like, were you going to earn 10 million over the rest of your life as over the rest of your working years? Maybe. Maybe not, because you can't get insurance if you're not going to, like, actually have a reason for it. You can't just, like, take out huge insurance amounts as almost like a lottery. Right. You know, if you're like, oh, I want to leave this gift for my wife, I'm going to over insure myself. Like, you can't necessarily just take out like all of the insurance.

Caitlin Okay. Okay. And what about for kids? Do people get insurance for their kids?

Kacie They do. Sara, do you have thoughts? Do you have opinions?

Sara I do not have insurance on my children's lives. I've heard, like, a couple arguments for it that didn't seem like in our situation to be super compelling. Like, one is like to pay for funeral expenses. In a worst case scenario, we wouldn't need that. But I could see, like, maybe in some families it would be difficult to come up with a 15 or $20,000 you want to spend on a a funeral. Another one I've heard is if you get a permanent life insurance policy, like a whole life or a universal life policy.

Caitlin Listeners, Kacie is nodding her head No, no, no, vigorously but.

Caitlin Silently. Yeah.

Sara That that you can I know you can have a policy in place in case the child is ultimately diagnosed with something that makes them uninsurable in the future. This is what I have that my parent's got a whole life policy or a universal life policy for me when I was eight years old, and it has some sort of cash benefit and or some sort of cash balance it has accumulated. I'm almost 44 years old now and it has, I think, a $50,000 death benefit. But at the premium is like $400 a year for a $50,000 death benefit. And I mean, just to put that in.

Kacie Context, years, how many years? Their financial.

Sara Advisors. Since I was eight.

Caitlin Right.

Caitlin Four minus eight times 400. They've paid $14,000 so far.

Sara Well, they paid it until I turned 18 and then I became the owner and then I paid it for a little bit until I was like, This is nuts. I'm not doing this anymore. And since then, the cash, I've just let it it's just keeps rolling over and it's like the cash balance is now being used to pay the premium because. Kacie Because I'm superstitious. I'm afraid that if I cancel this policy, I'm going to die.

Kacie Yeah, it's. Oh, I totally.

Sara Which is completely insane. And this isn't the best financial decision I've ever made.

Kacie Yeah, but it's like the one that's going to, like, you know.

Caitlin And it has.

Kacie Made me your kids now.

Sara Right? It has made me biased against universal life policies for children. But anyway, so. So like for the policies for kids, those are the two arguments I've heard for having policies for children. But we do not personally have life insurance policies on our children's lives.

Caitlin But on the face of it, let's just say they were still paying. Okay, I just did the math. I'm going to do it again. You said it's okay. 44 minus a 30.

Sara It's $417 per per year.

Caitlin I want to get the 417.

Caitlin It's just it's not the same without that. Okay. Times 417. Okay. Financial gurus your parents were spending will have spent, you know, if you died tomorrow. Knock on wood everybody. That $15,000 to get your family. $30,000. Is that a good financial deal? Like what if they had put that money in an index fund?

Caitlin Yeah, I mean, exactly.

Kacie Exactly. I mean.

Caitlin Exactly.

Kacie I feel like you're overqualified for this podcast now. Yes, that is exactly the math. Yeah. So that's why I have sour face when it comes to these permanent policies, because they are supposed to be providing risk management. But when you add in the pot of gold, that is the investment element. They feel tricky and they're more expensive and you're paying for both the insurance and you're paying for the investments inside it. And if you can find me a regular civilian that can accurately explain their policy, I have not met that person yet. I will never, ever, ever.

Caitlin Who's the civilian.

Caitlin That no one explicitly.

Kacie Like the.

Sara Person, the person with the policy who's bringing it in, and somebody.

Caitlin Who's.

Caitlin Sales person, my imaginary salesperson that I'm fighting with already.

Kacie Yeah. So that sales. Let's pretend that salesperson sold you the policy, right? You bought the policy. And then a week later, I'm like, Caitlin, explain your policy to me. You can do it. I can't do it. I can't do.

Caitlin It. You guys said.

Caitlin It was really good because.

Caitlin Later if she gets sick and she can't work, then and then she wouldn't qualify for her own life insurance. She'll already have it. And then her future kids will get $60,000 if she dies.

Caitlin Yeah. Which in today's economy, it would just be like, Are you fucking kidding me? Like a year of daycare. All right. Saved. Yeah.

Caitlin Yeah. So. And it seems like they're they're the people. Like, those are the types of policies that give the rest of us a lot of suspicion and skepticism about the insurance industry and then can, like, throw out all of it because it's like we think it's all a scam, which isn't. Yeah. You know, fair or practical.

Sara There are there are new like fintech companies coming on the market all the time that allow you to apply for term life insurance on your phone. So like there there are a lot of ways now where you don't have to talk to an insurance person If you just want something super simple, right? You can do it. Yup. What? What now I'm trying to think of like, what are some of the companies? Like, was Lemonade doing it? Lemonade was doing it right. So I can't remember if there life insurance but if you just like googled like term life insurance policy now there are a bunch of because it's a commodity. Do you know what I mean? Like it's like.

Kacie It's a commodity. It's like buying a car, right?

Sara You're just like kind of looking for the the cheapest premium, like with the most financially secure insurer, because you certainly want to make sure the insurance company doesn't think.

Kacie About.

Caitlin No fly by night. Yeah, no.

Sara I mean, so like, if you're you know, if you're trying to compare like Transamerica and what are some other ones the.

Kacie General.

Caitlin Like, yeah, you want to go with Transamerica, but.

Kacie You will you want Guardian, you want Transamerica, you want a name that you've seen. Yeah. So like, you want something that's getting those high ratings from the rating agencies and they are all very thrilled to tell you, hey, our best rating. And that's the name of the company. And best our best rating is like five stars or ten golden apples or whatever it's supposed to be. I don't remember. But like, they get rated.

Caitlin Okay. Okay.

Sara But I think the point, Caitlyn, is like, you know, if you were like, okay, I need to get a $500,000 life insurance policy, you could pull out your phone right now, Google it, download an app, do an application, and get a quote right away without having to talk to someone. You'll ultimately probably need to talk to someone at the company.

Caitlin Yeah, but yeah, you will.

Sara Yeah.

Caitlin And so but my fears of being up sold by a very persuasive salesperson are over done. If I can just do all of this on an app. And so I can, like, hedge against that a little bit.

Caitlin Yeah. And I think this like a.

Kacie Lot of it.

Sara And for me, Kacie, too, this also kind of falls into the realm of like get a life insurance policy and then reprice it next year if you don't like it or you think you could do better, just like get your feet under you get something in place, like you can always reprice the same thing.

Kacie Yeah. And you can reprice it. You can add to it. You can own more than one policy. I hate. So if.

Caitlin That's where it's like there's no excuse for not doing.

Caitlin This. Really?

Caitlin No simple financial task.

Kacie Yeah. I mean, Caitlin, this is how capitalism works, right? Like the the corporate overlords know that the millennials don't want to talk to people on a phone, So they have made it easier and easier and easier.

Caitlin Okay, here's another question for you. So I'm a solo parent and I have a house and I think of an eight year old. I think if I died, knock on all the woods and everything, my estate will take care of me just because of owning a home. And Austin like you know that. So I'm and also my parents are still alive. Like she'll basically take my place.

Caitlin In.

Caitlin An inheritance plan at whatever date that might happen. So for me, life insurance seems less. Urgent then disability insurance, because the bigger problem for everybody is if I survive and I need a lot of help and care.

Caitlin Boom. Got it.

Kacie Yup. Thank you for teeing that one up. Because yes, everybody thinks about life insurance and it is extremely simple. Like we just discussed. The reason that disability insurance is more expensive is because it's much more likely and you are more expensive if you are disabled. So this goes back to what is the easiest thing. Number one, look at your benefits at work. Please opt in.

Caitlin UNFREE Freelance Unpaid podcast Co-host.

Sara Let's check our group policy.

Caitlin See what Sara and I put on the napkin at the restaurant.

Kacie I know. Exactly. Check the napkin. But if you are at a small business or a solo or freelancer, what are your affinity groups? Who is your college alumni group like? There are places out there that you can you can be part of a group plan that is going to bring down that cost. I forced Sara to get long term disability.

Sara Yeah, Kacie. Kacie did force me. She hounded me weekly until I actually filled out the application and we ended up getting it through Kacie's. What was it, Napa? No, it was the.

Kacie Financial Planning Association.

Sara So she's a member. And because she's now a partner at Black Barn Financial, we all got access to the FPA, a short term disability policy, which was awesome, And she made us all do it.

Kacie Okay, So I found that for another client, he is a builder. Like, he's a one man company. There is a Texas Builders Association. That he's already a member of. So, yeah, again, like I say, you're an alumni group. They're always sending you postcards about cruises with old people.

Caitlin Exactly. Well, look, if you.

Kacie Look into what they offer for disability policies to any affinity group you you might be at. Yeah, there's a co-op, there's a union. Anything? Yeah. Find it. Find a group. Because it's going to save you some money. Right. If you have an individual disability policy, it's portable, which means it's not tied to that particular job or that particular association, which is good. But they're going to be a little more expensive because you are the only person in the pool. Right, right, right. So it's like if there's no one else to pay the premiums, if you are disabled and you stop paying premiums and start taking benefits. So that's why it's a little more expensive and the benefits are really great.

Caitlin But in doing the calculations, do you have to do the same kind of math? Whereas like, if I can only work one day a week or if I can't work at all or like that seems really hard to catch. There's so many more dying.

Caitlin We get it. Zero zero contribution.

Caitlin It seems much trickier with disability.

Kacie Oh, it's so awful. And the only good thing is that you're not coming from your income. You're coming from your expenses.

Caitlin Mhm.

Caitlin Okay.

Kacie So if you know, like, let's say you made $500,000 a year, but you're only living on 100,000 because you're so amazing at saving. Well you need to replace the 100,000. Okay. Not necessarily the whole 500.

Caitlin Okay. How much is it going to take to keep this whole thing afloat? Plus, medical expenses like in-home care, whatever it might look like.

Kacie Yeah. And then when you look at those long term disability policies, if you're getting it on your own, at least they're going to be will repay you if you can't do any job versus we will pay if you can't do your specific job. And that one is more tailored to like, okay, let's say I was a surgeon and I have to stand to do surgeries, but now I'm paralyzed and I can't stand anymore. Yeah, but I could still work. I could still do a computer job. I could be a financial planner. So those are like the some of the categories that I'll change the amount of expenses or the premiums that you're going to pay on the policies.

Caitlin Okay. And in terms are those term also is that your life time? Is it just your working life? Like how do you think about how long you're going to need it?

Kacie Yeah, it's your working life and there's probably like if you are within so many years of retirement and you have a nice nest egg behind you, you can probably quit paying that, right? Okay. But it's just like one of those things. As long as you're paying the premium like your car insurance, it's going to be in place. So if you quit paying, it won't be in place anymore.

Caitlin And you can never get that money. What if you do your whole 20 years paying in that life insurance and then it expires like. Congratulations. We never needed to pay this out, but that money is theirs. There's no, like, rollover into something. Like it's gone.

Kacie There are some complicated policies where it can roll into a long term care policy, but it's you have to think about it more as the risk mitigation. Like, if you're paying your homeowner's insurance, are you mad that you've never had a fire that burned your house to the ground? No.

Caitlin Right. No. No. No. Yeah. Yeah, I'd rather have separate policies just because then I feel like they're easier to understand. You said that many corporate jobs are like real non freelance jobs. Your workplace might offer some form of disability. Now if you are a salesperson or someone who works on commission, so your base salary like that would not actually, that would be a drop in the bucket of what you'd actually need. You can subsidize supplement. Yeah. Can supplement your insurance disability insurance with other policies.

Kacie Yeah. And that makes it so much cheaper out of pocket. So first of all, your your long term disability policy through work is probably going to be fairly cheap, right? Maybe like 40 or 50 bucks a paycheck at most. Right. Because there's a big pool of people. Everybody else is going to be paying the premiums. Even if you become a benefit, if even if you take benefits. Okay. But as a person, you reduce like back in by $100,000 spending, you reduce that pool of needed coverage by whatever your work policy will cover. And then you supplement it with your own personal policy. And that's going to make it cheaper. Right.

Caitlin So they don't say like, oh, you already had insurance. So like, this is invalid. That's not a thing.

Kacie Oh, not at all. Not at.

Caitlin All. No.

Kacie Okay. And I talk about long term disability because it's the one that like like you say, it's your whole working life. It's from the day you were disabled and then have met the 90 day, like, waiting period to age 65 in most cases. Okay. Everybody may have noticed you usually have automatic short term disability on your corporate job benefits. Short term disability. Like, I can barely think of anything that that actually covers other than being pregnant. Like a lot of companies, you have to use your short term disability for the first half of maternity and paternity leave. But like, that's that's the only thing that comes to mind of when short term disability works. There's probably other ones that I I'm not thinking of, but like it's not something that I would recommend you buy your own policy.

Caitlin Oh, I see that. Like it doesn't cover enough to invest outside of your workplace in a supplemental policy. Okay.

Kacie No, it's a it's a 90 day policy. Like, don't don't waste you. I don't I don't know where you would even get it. Like Aflac, maybe. I've no idea.

Caitlin Okay. Earlier, you mentioned personal umbrella policies and.

Caitlin Mm hmm. Oh, the best. Have the best umbrella.

Kacie Policies for everybody.

Caitlin Okay, so that's the policy that spans all life stages.

Kacie Oh, my God.

Caitlin Education.

Kacie Yes, yes, yes, yes. An umbrella policy is through your property casualty company, first of all.

Caitlin So do you have to own a house to get it?

Kacie No.

Caitlin Okay, perfect. So you can be a renter.

Kacie You can be a renter. So let's say you're a renter, but you have a real estate empire. Okay. You have all of these rental houses full of tenants who may or may not slip and fall, may or may not have, like, unruly dogs. You don't know. Okay. Your umbrella policy is above and beyond the coverage you have for, like, named concerns. The umbrella says.

Caitlin I could be the.

Kacie Transamerica or a I've forgotten all insurance companies now. Farmers, Allstate, whoever, Allstate, all.

Sara State Farm.

Caitlin State Farm.

Kacie State Farm, Geico.

Caitlin Who are they?

Kacie They're like, we're going to throw USAA. Thank you for all of these names. You appreciate it because I was.

Sara Looking for sponsors.

Kacie Family feud. I really would have been like the big X because I was like, oh, but they are saying we're willing to throw another million or 2 million on the pile. Like, she's never going to need this because that's the situations, the situations where this actually happens. Barely ever.

Caitlin Sure, sure.

Kacie We'll give you 2 million because like and for the listener, those were some very loud air quotes.

Caitlin Yeah, yeah, yeah.

Kacie Because, like, it's never going to happen. So that's why they're willing to do it. It's so cheap. It's like renters insurance, you guys to everybody. Everybody who rents should have renters insurance. I think it's a law in Texas.

Caitlin Mine is like $19 a month. Like it's suspicious. I'm like, well, you're really covered. Like, what does that buy paperbacks.

Caitlin In a flood? Like, what are you actually covering?

Caitlin And then when I added personal umbrella policy, it was like dollars. It was really it was like.

Caitlin Dollars.

Caitlin Dollars. I can't notice the difference.

Kacie I know. I know.

Caitlin I don't completely understand how I'll use it, but I know.

Caitlin That I should have it.

Caitlin Like, I get what you're saying is, like, my. I do own a house in Austin, so, like, if something happened to somebody at my house and my homeowner's maxed out at a million and they required 2 million of care or whatever to reconstruct their entire body or whatever it was, my personal umbrella policy would supplement whatever whatever the max was for the original policy that. So you have to have an initial the sort of base level policy that the personnel and ballot policy embellishes is that.

Kacie Yeah, that's what the umbrella umbrella has to have something to go over. You're exactly right. Like from a from a visual analogy, Yes. You have to have stuff under the umbrella for sure. But yeah. And the problem is like I feel like this is one of those cocktail party anecdote things. Everybody knows somebody where it went horribly wrong and they needed that policy and they may or may not have had it right. Okay. But like I know two different elderly women who had car wrecks, like, you know, a 20 mile an hour residential road car wreck, that the other person was absolutely destroyed. One person was paralyzed, one person was killed in another story. And and in both situations, like there was nobody was at major, major fault. It was just a fender bender type situation. And some a young person was paralyzed for the rest of their life. Or in another situation, you know, the the the person was was killed and she was at fault because she ran a red light.

Caitlin Okay. And so, like, if they had personal umbrella, like it goes way above and beyond the normal kind of like max out that we have for our other policies.

Kacie Yeah, absolutely. Okay. Yeah. And it's it's exactly the kind of thing And I don't know enough about property and Casualty to really be an expert, but it's the kind of thing like if you have young drivers or you have a lot of drivers and you're looking at ways to reduce your car insurance. Like, maybe look at the umbrella policy in addition to just having coverage on some of your other types of insurance.

Caitlin Right. Are there other types of insurance we as normal people I mean, obviously car insurance, you've said like we're not going to go over property or homeowners, all that stuff. Like that's a separate comp. Yeah.

Kacie I mean, of course, you have to have car insurance. You have to have homeowner's insurance. The only thing about homeowner's insurance, I would point out, is to definitely, you know, keep your head on a swivel, check in with whoever you're actually insured with. Shop around. Like like Sara was saying earlier, you can get better rates. You can get. Multi-car discount or whatever it is. So definitely look into all of those things because it's very, very easy for things to just. Inertia keeps us at a particular company. And then you look at it and you're like, Oh my God, the rates have gone up so much. Well, you call or you get on their website and you just mess around with the coverage and see if you can save yourself some.

Caitlin Kacie Do you have any opinion? Sara I'll take your answer as well.

Caitlin About why you've even here and this on this episode. So let's go get another drink. Oh.

Caitlin Oh. Do you have any opinion about the relative pros and cons of approaching insurance companies directly versus finding a broker that does all this work for you and that knows them all? Do you have any opinion about that?

Kacie Yeah, I do think that there's a lot of value in those brokers. As long as you're willing to kind of sit through that process. Absolutely. They are the experts. I mean, I truly believe that. And it's just like any other financial service, like they should be very open with how they are compensated. They should be very open to you about why they chose this particular company over that company. What are the. Like, if you specifically said, I want Jefferson life for my life insurance, but they come back to you with a guardian policy. Why? Okay. Oh, because they are only registered with that company and they didn't disclose that in the first place or or they said, no, this one has a policy that is specific to people in your situation for whatever reason, and this one's better than that one. You know, you want to know the reasoning behind these these different recommendations from the agents, but you just.

Caitlin Reason that they get a cut, a commission from whatever policies. Like that's just how it goes.

Kacie Like that's not that's what Yeah. That's the that's the only way they get paid. Yeah. Okay.

Caitlin So you're not paying them for the consult, but once you decide on one they'll get a commission on whichever one you choose. Okay. It's just good knowing it. It doesn't mean you don't support them. But, you know, unlike you guys, that our fiduciary is, that's the only like that. It is the industry norm for them to get a commission for what you buy from them.

Caitlin Absolutely. Yeah. Okay. Yeah.

Kacie So yeah, exactly as fee only in fiduciary advisors. We don't get commissions, we don't work that way. But of course we do get paid.

Caitlin Like, yeah. Yaddo Yeah.

Kacie We understand that they have to get paid too. But I want to work with somebody who's not going to try and sugarcoat it or hide it like that. Just that just gives you an icky feeling.

Caitlin Right? Right. No. And it's a good starting place to be. Like how many insurance companies can I get through you like? So that question is how Who are you registered with and why? And will you be able to give me some comparisons, Like if they're only registered with one, are they really going to give you information about the others that they're not that might be a better deal for you? They wouldn't exactly have to do your own frickin research even with that.

Caitlin Okay. Yeah.

Kacie Well, I mean, it's just buyer beware. Like, we all have to do our due diligence on these things. Absolutely. But that's where the Internet is so handy. The Internet's.

Caitlin Okay. So, Kacie, I know you mentioned long term care, and I feel like that's an entirely different conversation. So it's like important and we need to think about it, but might go beyond what we can talk about today. Is that accurate?

Kacie Yeah, I think that sounds about right, because these other two, they have a larger life window, whereas long term care is most of the time it's going to be for older people and you don't necessarily have the policies all at the same time that the way you do with disability, life insurance, property casualty, you know. Okay, So yeah, so let's table that one.

Caitlin Let's table it with the caveat that like, is there a rule of thumb about what age it's going to depend on your family's medical history, genetic, whatever, but like for quote unquote normal people, whatever. At what age are we supposed to think about? Let's just start there. So Sara and I know how long we have before we do an episode.

Caitlin On long term care call, and.

Kacie I'll take Sara's input on this, too. Yeah, exactly. How much better at all of this am I going to be when I have to come back and talk about long term care? I would say that the absolute bare minimum, again, unless there's something going on with your family, would be 50 at the very, very earliest. Okay. But most of the time I see people actually like go through the work and get a policy closer to 60, 65.

Caitlin Is that your experience too, Sara, with your clients?

Sara Yeah, I was going to say 50. I mean, there are cases where, again, like Kacie said, if especially if Alzheimer's and especially early onset Alzheimer's runs in your family and you have you get the genetic testing and you know, your predisposition to you would probably start earlier. But if that's not the case and it's just kind of a general worry that you have and want to try to mitigate that risk, then 5055 is probably when you start exploring options.

Caitlin Okay, So we'll wait till Sara and I get to that age per fitting. We won't take it on now. But one other thing you said towards the beginning was that we've talked about this like employers offer disability, like some version of disability insurance are there to employ as someone who's been freelance for a very long time, what else do you guys get that work in?

Kacie Oh my God, What is you're missing out on so many beautiful benefits. Okay.

Sara Dental, casual Friday coffee hours, free coffee.

Kacie You get to work remotely one day a week.

Caitlin Really cold, cold offices with fluorescent lighting.

Kacie All the staples you can use.

Caitlin Yeah, Post-its.

Kacie Yeah, free Post-its. So the biggest thing that I talk to people about, like the biggest low hanging fruit, the big juicy apple, if you have a corporate style job, is workplace benefits. I will frequently have meetings. We're during enrollment periods with my clients where the two of us are just paging through their benefits package, looking at all of the stuff that they can opt in on and choosing what should you opt in on? What should, what do you not need? What doesn't apply to you specifically? But yes, everybody should be taking advantage of all of the free stuff. First of all, that's step one. Anything that's free, do it. Number two. Yeah. Okay. They're going to they're going to charge you like $15 a paycheck for your long term care, disability or long term disability policy. Yes, please. I did have a client. I had a client who was the only breadwinner in his family. And he was an extremely high earner who had a bit of a Puritan streak. And so he opted out because it cost $15 a paycheck. And when I found that, I was just like, What do you think your family is going to do if you're disabled? What, sir? No. Fix this. So this is the kind of thing like put it on your your calendar when you're open. Enrollment is every year and they're short windows. Yeah, those windows are short. Yeah. You say. Yeah, like, you know, but you have a I've heard.

Caitlin Ha ha.

Caitlin Ha. Well, I get the e-mails.

Caitlin About Covered California like my my health care thing and they're always announcing that I'm not changing anything, so I don't have to do anything about it. But like, by the time I really clock that, the emails have been announcing that.

Caitlin The windows because it's like past. So I got it. Yes.

Kacie And that's what happens at the workplace too. It'll be like, Hey, our window opens October 1st. It closed October 15th. Nobody noticed. Yeah. And then next thing I know, I'm getting a call on the 14th at 4 p.m.. Oh, my God. We have to make benefit selections by tomorrow. Totally cool. I'll help you, but, yeah, do everything for me. Take advantage of the of the policies that are going to impact you and are affordable. But just look through your employer plan every year during enrollment and figure out what you want. Because like, there's a lot of good coverage in there. They do have pet insurance that a lot of the big tech companies now.

Caitlin Even City of Austin, when I worked there started offering pet insurance.

Kacie It's ridiculous. So if you.

Caitlin Get the insurance policy through your work and then you either get laid off or you change jobs, does it convey or. No.

Kacie So it's they're almost never portable. They're almost never portable. Yeah.

Caitlin Okay. So take it while you can get it. Yeah. Okay. But which means that when you if you're relying on a workplace policy and then you quit, you change jobs, part of that is really quickly getting a replacement insurance, especially for life insurance or these others that you were.

Kacie Yeah, that's why that long term care of. Why do I keep saying that long term disability and life insurance, getting it on your own means that you're not subject to the whims of whatever job you're at. Right. So, you know, you have that covered. And that goes back to our very first point here, which was these are building blocks. These are risk mitigation. This should give you the freedom to be more confident in changing jobs or to start working at a startup that may or may not pan out. I mean, they're not like risky, risky. But the things that could potentially throw a wrench in your finances.

Caitlin Yeah. Yeah. Okay. Kacie, one of the last things that I wanted to talk about, and that's unless the two of you have something else we need to know is like, how does this affect our tax planning? Like, is the money I'm paying for life insurance, Like, federal government doesn't care about that. Like.

Kacie No, you don't get it. You don't get any deductions on that. But the only thing about the tax element is that there are times that you you know, it's basically like, when am I going to pay the taxes on my money, Right. Am I paying it on the dollars that I used to pay the premiums? And if I did, then the benefit is usually tax free. Okay. But through if there is a work policy like your employer carries it on your behalf and you're not paying for it, then the benefits are going to be taxable.

Caitlin A-ha. So I happen to work for I work for Google and they pay my disability insurance and then I am in an accident and I have to actually get that money. I am taxed on that as income. Yep. Okay. So just another thing to keep in mind when you're getting your supplemental insurance, that that will be the one that you don't pay taxes on.

Kacie Yeah, exactly.

Caitlin Yeah. Okay.

Caitlin All right. Sara, did you have any other questions for Kacie about insurance?

Sara So at the end of each episode, we ask our guest to come up with one thing that a woman on the verge of a financial breakthrough can do today to move herself along her financial independence path. So what's one thing that someone can do today in regards to insurance?

Kacie Okay, so in regards to insurance.

Caitlin Umbrella.

Kacie Policies.

Caitlin Umbrella policy.

Kacie So cheap, so cheap, guys, so cheap.

Caitlin It was very easy to I just went online and added it. It put it in my cart and it was done.

Kacie I mean, the chances of you ever needing it are so slim. But also, like the protection, like Leonard Cohen sorts is protecting me from the doorbell.

Caitlin I mean.

Sara I think I'm going to do the umbrella policy today or maybe maybe tomorrow.

Caitlin You haven't got.

Sara One. I don't have an umbrella policy. I have all of the other insurance that we talked about. I have all of it. Lots of life insurance, lots of all that stuff. But I don't think I have the umbrella policy.

Caitlin And that one so easy. It'll really get you in the mood to go on to do the Life one.

Caitlin My project is the insurance. Yeah, it's a gateway.

Caitlin Insurance. My number one is finding my affinity groups that I qualify for and looking at the insurance offering because as a freelance person, like, it didn't occur to me that that was. I know it is in some things, but not in others. So that is my one thing this woman on the Verge is going to do after this episode.

Caitlin That's awesome. Exciting for you.

Music transition by Bad Bad Hats

Caitlin Hey, before we go, thank you so much to Kelly West, who co-produced and edited this episode.

Music transition by Bad Bad Hats

Sara If your partner is making you ask for money, giving you an allowance are not letting you know about family income. This could be economic abuse.

Sara Learn more at thehotline.org, or call one 800 799 safe.

Music outro by Devmo

Devmo I know the first thing you notice is that I'm covered in gold, the flick of the wrist it could turn a hot bitch cold, to get what you want in life girl you gotta be bold. Now Imma die rich, and I know...

Sara This podcast contains general information that is not suitable for everyone. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this podcast will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.