What a client’s financial plan doesn’t cover is as important as what it does.
Insuring against exposed risk is critical. It involves looking at a family’s ability to work without major interruption until planned retirement, taking into account potential costs associated with caring for an impaired retiree and, of course, understanding the impact of losing one or both family providers at any point.
Each of the three risk scenarios––loss of wages due to disability, major costs due to long-term care of a loved one and unexpected death––has its respective niche in the platform of the financial plan.
While disability and long-term care can have a major impact on financial goals, the biggest showstopper is the unexpected death of a family provider, whether a wage earner or a “family raising” partner.
Life insurance, as a key piece in the risk mitigation puzzle, offers a variety of solution variables to fit every planning and economic scenario. With term coverage, “Dial to Order” and lifetime options, there’s a solution for every client situation.
The key to proper planning is in understanding the needs associated with all these solutions. If a financial plan is expected to hold up in the face of the unexpected, all considerations of an untimely loss must be taken into account. Those concerns are typically adequate liquidity to cover debt, sufficient ongoing income for survivors, and provision for the rather substantial costs of a college education.
Outside the specific family issues, there may also be a business in need of a buyout option, a succession plan or an equalization of the business legacy to heirs not involved in the business, verses those directly involved.
Business owners quite often leave the door open to a host of problems that even a modestly successful business may create as it grows. Who takes over the leadership role when the owner passes? What if a key person is tragically removed from the equation?
What happens to heirs who are not a part of the business when the owner or owners die? The combinations and variations arising from an untimely death in a business can be catastrophic unless all contingencies are funded properly.
Owners quite often have plans they expect to be carried out at their passing, but more often than not those plans aren’t properly funded. Leveraging with life insurance provides an instant funding solution, as opposed to attempting to create a reserve over time for a tragedy that could occur tomorrow.