A Framework to Determine Your Insurance Needs

Matt Corthell, CFA, President and CEO |

Insurance comes in many varieties: Homeowners, auto, life, health, disability, long term care and of course those pesky extended warranties at the car dealership. Here is a framework we use to evaluate these insurances.

It’s important to recognize you will lose money on most insurance policies you take out. That is how the game works. The insurance company collects money from many people and only a small number of them have a bad event and need the insurance company to pay a claim. House burns down, car accident, death and many of life's other issues. Most of us, fortunately, do not ever need to contact the insurance company after a policy is established.

The key determinant when evaluating insurance is can you absorb the impact should a bad event occur. Here are some examples:

  • You’re in a one income household and become disabled

  • You plan to save for your child’s college but don’t yet have the funds

  • You’re pitched a bumper-to-bumper warranty for an extra 50,000 miles

In each of the above situations, the question you want to ask is can I pay for that without putting my financial situation into undo stress. For a single earning family, if they don’t have the assets to retire, it may make sense to consider disability insurance. On the other hand, a person who could retire right now but chooses to work may not need to incur the cost of a policy because they are self-insured by their nest egg.

Insurance needs are deeply connected to your financial situation and your goals. If you are interested in working with our advisors to evaluate your insurance needs as part of your financial plan, feel free to contact us here.


Wooster Corthell and its representatives are not licensed so sell insurance and do not receive commissions on insurance products. Any insurance needs discussed as part of an overall financial plan must be implemented through a qualified insurance professional.


This commentary reflects the personal opinions, viewpoints, and analyses of Wooster Corthell Wealth Management, Inc. “WCWMI” employees. The information presented should not be viewed as a comprehensive analysis of the topics discussed but instead is general in nature.

The views reflected in the commentary are subject to change at any time without notice. WCWMI makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented.

This commentary may contain information that might assist you in the development of subsequent discussions with the appropriate professionals and should not be construed as tax planning, estate planning or insurance advice. Neither WCWMI nor its employees are accountants, attorneys, or insurance agents. Therefore, please consult your tax professional, attorney, and/or insurance agent regarding your specific situation.

Wooster Corthell Wealth Management, Inc. has been an Investment Adviser registered with the Securities and Exchange Commission since 2001. Registration does not imply any level of skill or training. Additional information about us is available on the SEC's website at www.adviserinfo.sec.gov.