#121 - What You Should Know About Risk Management and Insurance

Jun 1, 2016

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Risk Management: It’s a boring topic most of the time, but not this time - I guarantee it! Welcome back to this episode of The Retirement Answer Man. I’m happy you’re here (I’m Roger Whitney, by the way). I hope that you’re ready for an important conversation today. And I mean that, it really is a vital conversation when it comes to safeguarding your assets and preparing you for retirement in a way that fits where you are at now and where you will be in the future. It has to do with risk management - which is the way in which you assess the amount of risk to your financial portfolio and life that exists, and what you’re going to do about it. Be sure you listen. This could save you thousands of dollars. What exactly IS Risk Management?

The very term “risk management” sounds like an oxymoron. I mean, how can you really expect to manage all the risks that exist in life? When we talk about risk management we’re not saying that you can manage all the risks of life, what we ARE saying is that you should manage those that you ARE able to manage. So proper risk management begins with assessing what you actually have that is at risk in terms of assets - your financial portfolio, your health, your income, and other important things. On this episode we go deep into the subject but keep it at a level that you can easily digest, so make sure you stick around for this episode. Why I’m talking with an insurance agent about risk management.

When it comes to managing the risk you have in terms of asset risk, you are either going to bear all of that risk yourself or you’re going to pay someone else to take on some of the risk. That’s where insurance, and a good insurance agent, comes into the picture. Today I’m chatting with Brian Certain. Brain is an experienced Allstate insurance agent in my neck of the woods and I haven’t met a person who’s a better resource for helping us understand this whole topic in layman’s terms. He brings it down to a level that anyone can understand on this episode so be sure you take the time to learn what you need to know about protecting your assets from the risks of life. You probably know that your insurance needs will change over time, but do you know why?

Most of us understand that our insurance needs change as we go through life. For example, a married father of four needs a different type and amount of life insurance than a retired widower of 84. But there’s another reason insurance needs change that has to do with your assets. As you accumulate more and have more net worth in particular, you have more to lose if you were to be sued. That’s where having a great insurance agent in your corner is of paramount importance. Your insurance agent knows the details of risk management like nobody else, but also is able to help you assess your needs at the various stages of your life. On this episode we’re going to give you some great tips to help you assess whether your assets are adequately protected and the S.M.A.R.T. spring segment is going to give you a simple assignment that will help you take the first steps to making sure they are. Are you risking hundreds of thousands of dollars over $100 a month?

On this episode of The Retirement Answer Man my guest is Brian Certain, an experienced insurance agent from the state of Texas. Brian said that he often hears people say something like this, “I don’t really like or trust my insurance agent but his price is $100 a month less than the closest competitor, so I stick with him.” Think about that reasoning for a minute as it relates to your homeowners insurance. Why are you willing to risk an investment of $200,000 or more for the sake of $100 a month by placing it into the hands of a guy you don’t trust? That doesn’t make much sense. You need an agent who you KNOW is giving you sound advice and on this episode we’re going to walk you through the “gotchas” you should look out for when dealing with agents and insurance. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

[0:26] Roger’s introduction to this episode of The Retirement Answer Man.
[1:39] Roger’s experience with Brian Certain

WHAT DOES THAT MEAN? SEGMENT

[3:04] Today’s term: Risk Management.
[3:44] Identifying and prioritizing the risks in life (and in retirement).
[4:20] The key to the risk management process - mitigation.
[5:39] Transferring risk to others (companies).

HOT TOPIC SEGMENT

[8:02] Auto insurance rates are rising at rapid rates.
[8:30] How claims are driving costs up.
[10:13] The possibilities of insurance costs changing further.

PRACTICAL PLANNING SEGMENT

[10:50] Brian Certain’s approach to risk management and liability.
[12:42] Assessing where your assets are for the sake of risk management.
[14:30] How a normal person approaches auto insurance amounts.
[17:22] What is a personal umbrella policy and what is it for?
[21:16] What sort of “net worth” are we talking about when doing risk management?
[22:05] Understanding deductibles and why they are in place.
[22:50] Looking at additional forms of insurance.
[24:26] How to avoid the “gotchas’ when it comes to insurance.
[29:53] Why a trustworthy agent is such a vital piece of the decision-making process.

TODAY’S SMART SPRINT SEGMENT

[31:34] Connect with your insurance agent to assess your situation AND get some independent quotes.

THE HAPPY LAB

[32:42] How risk management has impacted happiness: a perceived overload of risk.
[34:04] The little things we can do to remain happy in dealing with risk.

RESOURCES MENTIONED IN THIS EPISODE

Brian Certain’s website: https://agents.allstate.com/brian-certain-arlington-tx.html

Texas Department of Insurance Comparison Tool

Contact Roger: http://www.rogerwhitney.com/retirementanswers/

Roger’s retirement learning center: www.RogerWhitney.com/learn

The Retirement Answer Man Facebook page: www.Facebook.com/RetirementAnswerMan