At Capital Insurance, we try to serve Spokane, WA as a trusted friend and an insurance agency. You may have read that most insurance and financial consultants consider 40 to be the turning point for being able to completely rebuild retirement savings by the typical requirement age. We want to explain why and how umbrella insurance can save you from such an arduous task.
If You’re Found At Fault For An Accident
A lot can happen in life. You could incur liability by libeling someone or causing an accident. However it happens, if the court finds for the injured, you will have to pay a settlement. That means you will need to pay a lump sum of money to the injured.
Your home or auto insurance provides a limited amount of liability coverage. It may not cover the full settlement. What your insurance does not cover, you pay out of pocket. For some individuals, that means selling some stock; for others, it means making an early withdrawal from their retirement savings.
Withdrawing early money from retirement accounts, such as 401(k) accounts, incurs a 10 percent tax penalty and you then need to rebuild your IRA to its previous balance.
How Umbrella Insurance Helps
If a person pays out of pocket for a liability loss, that is what happens. Having umbrella insurance solves the problem of needing to pay out of pocket or rebuild savings, so you can provide for yourself in retirement.
If you have yet to reach the age of 40, you have time to rebuild your IRA to its prior balance by making extra deposits. It might require taking a part-time job, but it’s theoretically possible. After the age of 40, most individuals could not completely rebuild an IRA to its appropriate balance. It would require more deposits than legally allowed.
Umbrella insurance saves you from this scenario. Insurance agents recommend umbrella coverage more heartily for those 40 years of age and older for this reason. Umbrella coverage picks up where regular liability coverage leaves off. With it, when your primary policy, such as your auto coverage, pays out fully, the umbrella kicks in and covers the rest. You never need to access your retirement funds early. Umbrella coverage pays for the settlement for you.
Contact Us Today
Why wait and tempt fate? Protect your way of life in Spokane, WA with umbrella insurance. Contact Capital Insurance today to start your policy.
