The Money Navigator by Paul C. Bennett

Author:Paul C. Bennett
Language: eng
Format: epub
ISBN: 9781626344426
Publisher: Greenleaf Book Group
Published: 2017-11-15T05:00:00+00:00

1FINRA, “Equity-Indexed Annuities—A Complex Choice,” http://www.finra.org/investors/alerts/equity-indexed-annuities_a-complex-choice.

How Insurance Fits In and Why It Should Not Be Neglected

Insurance is a foundational tool in financial planning. Close your eyes and visualize a picture of the great pyramids in Egypt. The pyramids clearly had strong foundations. Similarly, you need insurance first, which is quite simply risk management and risk transfer. By purchasing an insurance contract, regardless of the type, you are deciding to transfer a risk you currently bear to a third party, the insurance company. If your current financial advisor is not addressing your overall insurance portfolio and planning with the same vigor and acumen as your investment management, that is a serious problem. By neglecting to analyze your insurance needs, you open yourself up to a whole host of risk management issues that could be detrimental to your financial well-being.

Think about it: what is your greatest asset? What asset could you simply not do without? The answer is your ability to earn a living! How do you insure that? Simple: you have adequate disability insurance so in case you become disabled and can no longer work, you’ll still have income coming in to cover all of the bills that won’t stop coming in just because you are not employed.

What if you’re driving along on the highway and you accidentally rearend someone? You both pull over to the side of the road and they see that you are driving a fairly nice automobile and you are dressed professionally. Then, all of a sudden, their neck just happens to start hurting. Three weeks later you have a lawsuit filed against you for $1 million. What just happened? In today’s litigious society, this situation could occur any day, so why not have a personal umbrella liability policy of an adequate amount to cover these sorts of possibilities as opposed to not even thinking about it during your planning, only to be surprised if it took place?

If you died tomorrow, can you honestly say you know for certain that you own enough life insurance to enable your family to continue to live the lifestyle to which they have become accustomed? If you think you have the proper amount of insurance, do you know if you are paying too much? Do you own the appropriate type of life insurance based upon your goals, objectives, risk profile, and time frames? Do you still even need life insurance given your current stage of life? Does your spouse need life insurance or should you own policies on your children? Should you even personally own your life insurance or do you need a trust? Answering these and other questions is important in understanding that you need some sort of coverage, and in establishing how much is right for you.

Paying for long-term care expenses is another issue many individuals are facing today. This is due to the fact that we are all living longer, but eventually time catches up to us, and in many instances a long-term care illness is the result. These are expenses associated with home health care, assisted living, or nursing home care.

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