Personal finance protection planning is a crucial component of comprehensive financial management that focuses on safeguarding your financial well-being against unexpected events and risks. It is not just insurance!  Main areas include

Health Insurance

Health insurance serves as your primary defense against potentially catastrophic medical expenses. Without adequate coverage, a single serious illness or accident can devastate your financial stability, leading to bankruptcy or forcing you to deplete savings and retirement funds.

Key considerations include understanding different plan types like HMOs, PPOs, and high-deductible plans; evaluating coverage networks and provider accessibility; comparing deductibles and out-of-pocket maximums to balance premium costs with financial protection; reviewing prescription drug coverage and preventive care benefits, and ensuring your preferred doctors are in-network when choosing a plan.

Action Step: Review your current health insurance coverage during open enrollment and compare at least three different plans, calculating total annual costs, including premiums, deductibles, and estimated out-of-pocket expenses, based on your typical healthcare usage.

Life Insurance

Life insurance provides financial security for your dependents in the event of your death, replacing lost income and covering outstanding debts, mortgages, and future expenses like children’s education.

Important factors include choosing between varying term life insurance, which offers coverage that expires after the term of the policy (i.e. 5,10, 20, 30yrs) at a lower premium.  Term life insurance can be a good option for those who want to get the most coverage for the lowest premium.  Young families or those with financial obligations that will go away at some point may want to consider term life insurance.

The alternative is permanent life insurance like whole, universal, or variable policies that combine death benefits with cash value accumulation, but at higher costs. The general rule is to have coverage worth 10-12 times your annual income, though individual needs vary based on debts, dependents, and financial goals.

Action Step: Calculate your life insurance needs by adding up your annual income multiplied by 10, plus outstanding debts, mortgage balance, and estimated future expenses like children’s education costs, then obtain quotes from at least three insurers for appropriate coverage amounts.

Disability Insurance

Disability insurance protects your most valuable asset: your ability to earn income. Statistics show that one in four workers will experience a disability lasting at least one year during their career, yet many people overlook this critical protection. Coverage options include short-term disability that typically covers 3-6 months of income replacement and long-term disability that can provide benefits until retirement age.  

Disability insurance may be accessible through employers as a group policy, which often provides basic protection.  Individuals can also get their own policies that offer more comprehensive coverage and portability. Key features to evaluate include benefit periods, elimination periods, and whether benefits are adjusted for inflation.

Action Step: Contact your HR department to understand your employer’s disability benefits, then research individual disability insurance quotes to determine if you need supplemental coverage to reach 60-70% income replacement.

Property Insurance

Property insurance protects your physical assets including your home, vehicles, and personal belongings. Coverage types encompass:

• Homeowner’s or renter’s insurance that covers dwelling damage, personal property loss, and liability protection if someone is injured on your property
• auto insurance is legally required in most states and should include adequate liability coverage along with collision and comprehensive protection, and
• umbrella insurance which provides additional liability coverage beyond standard policies to protect against lawsuits that could threaten your assets. Regular policy reviews ensure coverage limits keep pace with asset values and inflation.

Action Step: Conduct an annual insurance review by documenting your assets’ current values, comparing coverage limits to replacement costs, and obtaining quotes from at least two other insurers to ensure you’re getting competitive rates and adequate protection.

Identity Theft Protection

Identity theft protection safeguards your personal and financial information from criminals who steal identities to commit fraud, open accounts, or make purchases in your name. Protection measures include monitoring credit reports for suspicious activity; receiving alerts about potential breaches of your personal data; accessing recovery services if your identity is compromised; utilizing real-time monitoring and dark web surveillance through paid services; and implementing basic protective measures like regularly reviewing financial statements, using strong passwords, securing personal documents, and being cautious about sharing sensitive information online or over the phone.

Action Step:

• Freeze your credit at all three credit bureaus – Experian, Transunion and Equifax. 
• Set up free credit monitoring by requesting your annual credit reports from all three bureaus at annualcreditreport.com
• create a calendar reminder to check them every four months
• consider signing up for a comprehensive identity monitoring service if you regularly handle sensitive information.

Estate Planning

Estate planning ensures your assets are distributed according to your wishes while minimizing taxes and legal complications for your heirs. Essential components include:

• creating a will that directs asset distribution and names guardians for minor children
• establishing powers-of-attorney for financial and healthcare decisions if you become incapacitated
• considering trusts that can provide benefits like probate avoidance, tax planning, and asset protection, and
• conducting regular updates when life circumstances change such as marriage, divorce, births, or significant changes in asset values.

Without proper estate planning, state laws determine asset distribution which may not align with your intentions.

Action Step: Schedule a consultation with an estate planning attorney within the next 60 days (about 2 months) to create or update your will, powers-of-attorney, and healthcare directives.  Bring a list of your assets, beneficiaries, and any special wishes for asset distribution.

Emergency Fund

Our recent blog discusses creating an emergency fund in detail. An emergency fund serves as your financial safety net, providing liquid cash to handle unexpected expenses without going into debt. Key considerations include saving 3-6 months of living expenses, though the exact amount depends on a few risk factors such as job stability and family situation, etc. The emergency fund should be easily accessible. Consider putting the funds into a high-yield savings account or money market account, maintaining separation from your regular checking account to avoid temptation. LA well-funded emergency fund reduces reliance on credit cards or loans during financial hardships, while also providing peace of mind for unexpected situations.

Action Step: Calculate your monthly essential expenses, multiplied by your target number of months (3-6) while setting up automatic transfers to a dedicated high-yield savings account to build your emergency fund. Start with whatever amount you can afford until it gets to your target amount.

For more information or to ask a question, please contact Jenifer@mosaicfi.com

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Mosaic FI, LLC is a State of Illinois registered investment adviser. The opinions expressed herein are those of the firm and are subject to change without notice due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of Jenifer Aronson and Leslie Meisner, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes , June 13, 2025.

Mosaic FI, LLC has provided links to various other websites. While Mosaic FI, LLC believes this information to be current and valuable to its clients, Mosaic FI, LLC provides these links on a strictly informational basis only and cannot be held liable for the accuracy, time sensitive nature, or viability of any information shown on these sites.