Managing Liabilities with a Smart Insurance Plan

Joseph Stephens |

The notion of needing protection from the impact of a car accident or a fire at home is something most of us learn with the purchase of our first vehicle and house. We tend to become better acquainted with life insurance with marriages, the arrival of children, or estate planning. Over time we typically begin to acknowledge that sometimes people become sick and need extra care that can rapidly deplete assets, leading to a desire for education on CCP Disability Benefits and long-term care coverage.

Are these the only liabilities that can, or should, be insured against?

The best answer to this question is a resounding - it depends!

Entrepreneurs and business owners know that financial risk comes both from personal circumstance, as in the above examples, and from professional duties. Sometimes insurance is an important part of business financial strategy. A Key Person Policy, insuring the life of a founder or important executive, is oftentimes the best way to manage business continuity in the event someone critical to the business dies unexpectedly.

I am healthy and take good care of myself; do I really need to worry so much?

Firstly, one shouldn’t negate the fact that unforeseen accidents do happen to even the healthiest individuals; moreover, those who are healthy and have a family history of longevity also face what is known as ‘longevity risk’.

It’s counter-intuitive to think that living too long is a risk, but for most of us the reality is that it is entirely possible to outlive our savings. With life expectancies rising and medicine advancing by leaps and bounds this is a particularly pressing concern, even for those with less than healthy habits or genetic history.

Fortunately, there are options to ensure that you outlive your money. Single Premium Immediate Annuities (SPIA) are a great option to provide income for life; however, SPIA’s are provided by a variety of companies and have menus of benefits that aren’t necessarily intuitive or easy to navigate. For this reason the purchase of something as important as an SPIA is best managed through a comprehensive insurance plan that provides robust solutions, and that take into account all of your obvious and, perhaps, less apparent risks.

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2024 Advisor Websites.