Once you pass your 40th birthday, you might notice that your Bayshield Insurance agent often suggests an umbrella policy for you. San Jose, CA residents may wonder why that happens. Your insurance agent understands how a liability settlement could adversely affect financial security and wants to help you protect yours.
Umbrella Coverage Provides Significant Liability Protection
An umbrella, secondary insurance policy pays out once your primary policy’s liability limit caps. Once you purchase the maximum liability protection on your primary policy, you can add an umbrella policy with one million dollars of coverage for just a few dollars per month in premiums. If you incur liability for any reason, from libeling or slandering someone to a person getting injured on your property, the primary policy pays out first, and then the umbrella takes over.
Why Carry Umbrellas After 40
So, umbrella insurance covers excessive liability costs after your primary policy pays out. Now, here’s why that becomes more important after you reach the age of 40. If you do not carry umbrella coverage and incur an expensive liability settlement in your 20s or 30s, you might need to use your individual retirement account funds to pay the settlement.
Let’s say it happens when you’re 25 and plan to retire at 65. You’ve got 40 years to replace the money used to pay for the settlement. Even if you had to spend $100,000 of savings, paying yourself back at a rate of $48.07 per week on top of your regular contribution, you would rebuild that savings by 65.
Now, consider if it happens when you’re 45. You have 20 years to rebuild the savings for retirement. You would need to contribute $96.15 per week over and above your normal IRA contribution to pay back your retirement funds. Without umbrella insurance, you also lose the interest you would have accrued on the $100K.
With Umbrella Insurance
After age 40, it becomes harder to pay back this money while maintaining regular retirement deposits. With an umbrella policy, the insurance covers the settlement, and your financial security remains intact. You have nothing to pay out or pay back. With an umbrella policy in force, you pay a few dollars per month in premiums for $1 million of liability coverage. That’s enough to cover nearly anything, but if you need a bigger umbrella, we can help you build that policy.
Contact Us Today
Enjoy your life in beautiful San Jose, CA, and enjoy the peace of mind that an umbrella policy can help bring. No matter how you incur liability, your Bayshield Insurance umbrella policy covers it. Call or email us today to get your policy started.
