INDIANAPOLIS (WISH) - Financial experts call it "risk management," but you know itbetter as "buying insurance." It's a necessity that can be costlyif you're not careful.
In week 5 of the Money Watch 8 Challenge: 60 Days to Change ourthree families found out how they can save money on insurance withone simple move. This week also included the emotional impact ofpreparing for end of life issues.
Everyday we all face risks; from car wrecks, to a fire thatcan wreck your home, to natural disasters that can end your life.
"Insurance is about laying your risk off onto someone else,"said Peter Dunn, the financial expert behind 60 Days to Change.
Dunn said buying insurance won't keep you from having anaccident or facing a life-changing event, but it will cushion theblow when and if it happens.
"I might have to move in with my daughter. She would loveit," said Merita.
Merita and Joe understand the need for insurance. But likemany, they don't understand insurance policies.
"To me it's very hard. Just the way, you know explain things,especially when an insurance agent comes over. You have no ideawhat he's talking about. Of course, he knows what he's talkingabout," said Joe.
"There are a lot of misnomers out there," said InsuranceAgent Roy Lederman.
Lederman realizes insurance can be confusing. But he said youcan't let that keep you from getting the kind of coverage you need.
"Typically, they say anywhere from seven to ten times yourfamily earnings are in the household. But that's for someone whohas dependent children at home. For someone who is single, thenumbers may be quite a bit different," said Lederman.
Working Dad Brent said, "I didn't want to buy her nexthusband a boat, but uh."
He found out he needs about twice the amount of lifeinsurance he currently has.
"Amy would be in a position to have to go back to work almostimmediately," said Dunn.
"I do think it makes more sense and I definitely want to makesure that our boys are covered," said Amy.
"Wow, there's really no reason not to I guess," said Brent.
Dunn said putting all of your insurance policies with thesame company is a good way to save money.
"We had the homeowners and car insurance on one policy andthen they cancelled our coverage. Due to a certain young driverthat had too many tickets," said Merita.
Dunn said, "I think with the right phone call you could save$4 to $500 a year. And then you can put that money to some otherfinancial priorities."
Dunn also recommends you have a will.
"I don't. I figured I was too young for a will," said Nadia,a single mother.
"Wills are important, but not in the way most people think.Wills become excruciatingly important when there can be a conflictwith family over who gets what in the event of someone's demise,"said Dunn.
For single parents like Nadia that includes who would takecustody of her child.
"It really hasn't been talked about. But I would imagine hewould be with his dad or his grandmother," said Nadia.
It's important to work that out ahead of time. Our familiesare learning that taking control of their financial future alsomeans preparing for unexpected disasters. Dunn said your willshould include provisions such as a power of attorney for financesand health.
Next week, is the halfway point in the 60 Days to Changeprogram. Hear how the families describe the impact the program hashad on their lives.
Click here to join the Money Watch 8 Challengeany time.
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