Risk Transfer: The Insurance Stack

Insurance is a risk-transfer contract, not an investment. Its sole purpose is to protect you against a catastrophic loss that would otherwise ruin your balance sheet. You should never purchase insurance for minor, affordable expenses. Instead, buy high-limit coverage for low-probability, high-severity risks.

Review your risk-transfer stack annually:

Medical and Disability

Protects your physical health and your capacity to sell labor.

Life and Property

Protects your dependents from the loss of your earning power and shields your physical real estate assets from destruction.

Umbrella Liability

Shields against catastrophic civil claims that could otherwise wipe out your balance sheet.

See chapter “Insurance: Shielding Your Assets and Family” for the full mechanical treatment of each policy class.