Is your insurance keeping up with your net worth?

Insurance is the part of a plan that gets set up once and then quietly stops matching the life it was bought for.

That's understandable. The policies were right when you bought them.

But nobody sends a reminder when your net worth doubles. Or when coverage sized for a $600,000 house is now protecting three times that. Or when the disability policy tied to an old employer stopped applying the day you changed jobs.

The failure mode isn't being uninsured. It's being insured against the risks you faced a decade ago.

The short answer. Check three things. Whether your liability limits match the net worth you have now rather than the one you had when you bought them. Whether your disability coverage actually replaces your real income. And whether you've decided how several years of care would be funded, rather than leaving it undiscussed.

For the care question the numbers are public: CareScout publishes national medians each year, and Medicare states its own limits, which do not extend to custodial care.

Liability is where the exposure hides.

For households with meaningful assets, the largest uninsured risk on the balance sheet is often liability, and it gets the least attention.

Standard homeowners and auto policies carry liability limits set for a typical household. A judgment beyond those limits reaches your assets. Not just the assets connected to the incident. All of them, including the accounts funding your retirement.

Excess liability coverage, usually called umbrella coverage, sits on top and extends the limits. It's typically inexpensive relative to what it protects.

The common error is simple: an amount chosen years ago, against a net worth that has since grown past it.

Each of these raises your exposure in ways the original policy may not contemplate:

• Teenage or young adult drivers on your policy
• Rental property
• A boat or a pool
• Serving on a nonprofit board
• Hosting at your home

Disability, while you're still earning.

If you're still working, your ability to earn is usually the largest asset in the plan, and often the least protected.

Group coverage through an employer is a reasonable base and rarely sufficient alone. Three things commonly surprise people.

It replaces a percentage of base salary, often excluding bonus and incentive pay. For many high earners, that's most of the income.

Benefits from employer paid coverage are generally taxable, so the replacement is smaller than the percentage suggests.

And the definition matters enormously. A policy that pays only if you can't perform any occupation is a fundamentally different product from one that pays if you can't perform your own.

An individually owned policy, paid with after tax dollars, is portable and generally pays benefits tax free. For a specialist whose income depends on a specific capability, that distinction is the whole point.

Long term care, without the scare tactics.

This is the risk that gets sold badly, and the discomfort around the sales approach makes a lot of families avoid the subject entirely.

The planning question is narrow, and we work through it in how do you plan for long-term care. If one of you needed several years of significant care, what would fund it, and what would that do to the survivor?

For some households the answer is that the portfolio absorbs it, and no product is needed. Self funding is a legitimate plan when the assets genuinely support it and both people understand the arithmetic. For others, part of the risk is worth transferring. The market now includes policies that pay a death benefit if care is never needed, which answers the usual objection.

What doesn't work is leaving it undiscussed. The cost lands on the survivor, during the period when they're least able to reorganise a plan.

Life insurance changes purpose over time.

While you're accumulating, life insurance replaces income. Term coverage sized to the years your family would be exposed does that job cheaply. For most people, for most of their working lives, that's the whole answer.

Once the assets are sufficient, income replacement stops being the reason. If life insurance still has a role, it's usually one of three:

• Providing cash for an estate holding illiquid assets
• Equalising an inheritance when a business or property can't be divided
• Funding a buy sell agreement between partners

Those are structural purposes, and they're the point at which permanent coverage can be worth its cost. They're also the point at which the policy belongs in the same conversation as your estate planning rather than being reviewed on its own.

Permanent policies bought years ago for income replacement reasons are worth examining rather than assuming. Some are performing as expected. Some are not, and an in force illustration will tell you which.

Nothing here sits on its own.

Insurance looks like a separate category with its own agent and its own renewal date. It isn't. Your liability limits are set by your net worth. Your care decision changes what the survivor's plan can afford. A life policy can be the difference between an estate settled calmly and one sold in a hurry.

Reviewing the whole picture rather than one product at a time is what how we work means here.

We don't sell any of it.

Cosmos Wealth doesn't sell insurance and receives no commission on any policy. That means we have no interest in whether you buy one, which is the position we'd want an advisor in when reviewing our own coverage.

What we do is look at what you're carrying, identify where the plan is exposed, and work alongside an independent agent when something needs to change.

If it's been more than a few years since anyone looked at your coverage against your current balance sheet, let's talk.