Risk / Insurance Planning
If there’s one thing certain about life, it’s the unpredictability of what ‘might’ happen at an unexpected time. The best laid plans may still be impacted by surprising life events. Even though you may think you have covered all the bases, life has a way of throwing all of us a curveball along the way. To address these there are ways you can hedge your bets against unintended events by finding options to transfer some, or all, of that risk. Having a conversation on whether it makes sense to create an actionable plan to help provide some peace of mind should be part of every well-constructed financial plan.
Why Risk / Insurance Planning Is Important
Financial planning is far more in depth than just having a 401k or ROTH IRA accounts, or the opportunity to travel, play golf and spoil the grandkids. In fact, a big piece of financial planning at ALL stages of life is about proactively strategizing the “what if” situations. How would certain surprise life events impact your spouse, kids, parents, customers, etc? It's valuable to understand the impact of different types of risk during your working years as well as in retirement.
A well thought out, comprehensive financial plan includes analyzing all types of risks involved in your financial life throughout the timeline of your entire financial plan. Thoughtful risk planning may help mitigate the risk you cannot foresee.
Risk / Insurance Reviews
When it comes to creating various types of financial plans, it is most often better to work proactively vs. reactively. Some households may have blind spots potentially derailing financial plans temporarily, or potentially derail things more severely. Do you decide to take on all the risk and incorporate self-financing for various situations? Does it make more sense to find ways to transfer some, or all, of that risk? While it may be impossible to plan for every scenario, we can pro-actively talk about what options exist for common scenarios impacting families and their lives before and after retirement.
Together we will review various areas that may impact financial plans:
Comprehensive Review: We will take a look at your insurance coverage to ensure if it still meets your needs. We also want to make sure part of that process is understanding types of insurance that require you to pay a deductible. It will be valuable to understand how to build your savings plan around what cash liquidity your insurance plan may require. If you do not currently have a risk / insurance plan in place we can talk about different solutions. In some cases, we will be happy to provide you referrals for areas of coverage we do not offer.
Life insurance: Well-built financial plans must consider how your role affects those around you. Are you the main source of income? Are there others who financially depend on you (spouse or partner, minor children, children in college, children who have special needs, aging parents, etc.)? Are you a two-income household? What would the impact be if one income disappeared? Is your only life insurance currently through your employer? Do you understand the differences between Group Life Insurance, Term Life Insurance, various forms of “Cash Value” life insurance, etc.? We can help walk you through how each operates, what role they play in your plan and evaluate the long-term impact of them.
Retirement income through annuities: Sometimes when various markets have swings in performance this can be overwhelming to experience. The closer we get to retirement the more we are looking for ways to protect the assets we have built. It is common to have questions on how to protect your investments, create an income stream, and other ways to create predictability in your retirement finances. Annuities may help transfer some of the market risk to potentially provide you some predictability with a portion of your investments. There can be several types of annuities to consider across a variety of providers. Each may vary in terms, investment options and distribution pay-out options. We can walk you through how they work, what risks may be involved, what features they may have as well as create transparency on their associated costs.
Short Term and Long-Term Disability: In most case people have access to this coverage through their employer, but many times they are not aware of how it works, what it might cover, when it would apply or even whether it might be taxed when used. Education surrounding various types of insurance, including coverage you may have, is important to understand in the event you need to use it.
Long Term Care coverage/Options: Most of us have known a family member, friend, or neighbor who required help following an accident or as they grew older. Long term care (at-home or in a facility) can be extremely costly and has the potential to leave surviving loved ones in a financial hole if a plan is not in place on how to address the ever-rising cost associated with providing long term care. Having a discussion to review your options is an essential part of a comprehensive financial plan. Understanding both traditional and non-traditional options may help provide a peace of mind for you and beneficiaries.
Estate planning considerations: While many people don’t like to think about this part of life, it is one of the most critical components to address when creating your financial plan. Learning the basic components of a Will and / or a Trust is critical to your long-term financial planning success. Understanding how your investments, debt, insurance, annuities, real estate and other assets you have worked hard for, and how they are to be addressed, if something unexpected happens to you is critical. A well-constructed Will and / or Trust can help alleviate the pressure from your loved ones to make detailed decisions and it will ensure your wishes are honored.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent.
Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.
