The Insurance Every Equity Comp Professional Should Have

Insurance, like estate planning, is one of those topics nobody wants to talk about, because ideally, you’ll never need to use it. It only shows its value when something goes wrong. And let’s be honest: life is already stressful enough without thinking about worst-case scenarios.

But, unfortunately, insurance is essential. It’s not about fear, it’s about protection. The last thing your loved ones want to worry about during a crisis is how they’ll pay the bills. Insurance makes sure they won’t have to.

For professionals, especially those with equity compensation, there are three types of insurance you absolutely need to be properly protected while you’re still in your working years:

1. Life Insurance

Why it matters: Life insurance provides a financial benefit if you pass away. It helps your loved ones replace your income, pay off debt, or fund future goals like education.

When you need it: As soon as someone else depends on your income. That could be a spouse, children, or even a parent you help support.

Types to know:

• Term Life Insurance is usually best for younger professionals. It’s affordable and covers you for a set period (like 20 or 30 years).

• Permanent Life Insurance lasts your whole life as long as premiums are paid. It’s more expensive but may offer tax-advantaged savings benefits. It can make sense if you’re already maxing out your retirement accounts and still need coverage.

Key Tip: Start with term. Revisit later if your financial situation becomes more complex.

2. Disability Insurance

Why it matters: Disability insurance protects your income if you become unable to work due to illness or injury. And if you’re single, you might be your only safety net.

What to look for:
Most employers offer some group coverage, but it’s often not enough, especially if you’re earning a high income or receive a large portion of your compensation through bonuses or equity.

If you work in tech or another field with equity comp, make sure your policy considers your total comp, not just your base salary.

3. Home, Auto & Umbrella Insurance

Why it matters: These protect your assets, like your home, your vehicle, and yourself, from accidents, damage, and lawsuits.

Key considerations:

• Make sure your coverage limits reflect current property values. Don’t rely on the default settings your insurer gave you when you first signed up.

• Add umbrella insurance to increase your liability protection beyond what your homeowners or auto policy provides.

• Be sure to include uninsured/underinsured motorist coverage to protect yourself if you're ever injured by someone who lacks adequate insurance.

Why This Matters

If you’ve worked hard, built wealth through stock compensation, and are finally gaining traction toward your financial goals, don’t leave yourself vulnerable. Insurance isn’t just about preparing for disaster, it’s about protecting your future.

I know it’s not a fun topic. But it's a necessary one.

Getting the right coverage can give you, and your loved ones, peace of mind. And if something does go wrong, you’ll be glad you took the time to plan ahead.