Eight Ways to Protect Your Financial Life

Key Takeaways

• Umbrella insurance provides liability coverage above your homeowners and auto insurance limits—get it if you have significant assets to protect beyond standard policy caps
• Disability insurance replaces your income if you can't work due to illness or injury; this is critical since most people are more likely to experience a long-term disability than death during their working years
• Long-term care insurance covers nursing home, assisted living, or in-home care costs for chronic illnesses or disabilities—consider purchasing before age 60 when premiums are lower
• Life insurance protects your beneficiaries financially after your death; the amount needed depends on dependents, debts, and income replacement goals
• Create an estate plan with legal documents specifying how your assets will be distributed after death to avoid probate complications and ensure your wishes are followed