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.

A thorough understanding of the financial and life goals within a family help determine the best life insurance solution or solutions to meet those objectives. Term insurance can fulfill a broad spectrum of family requirements. A young family may have a limited budget, but have great need, such as young children to raise and send to college.

Term coverage for 20 or 30 years can be just the right fit as an income-replacement vehicle. A major consideration with term coverage is the ability to convert some or all of the coverage to a permanent solution, whether it seems necessary or not at the time of application.

The worst news is to find out 16 or 18 years into the policy that the insured is either no longer insurable or unable to obtain a favorable rating for new or additional coverage, and cannot convert the existing plan. Or, an insured reaches the end of coverage and is diagnosed with a terminal illness and becomes faced with monumental premiums to keep the policy going. So, leaving conversion options open is a must.

Lifetime coverage may be a necessity for some in their overall planning and for that, options abound. Traditional whole life is always a secure choice and actually a way to build a cash reserve from which an insured person can borrow at some time in the future. There are, of course, caveats to borrowing too heavily from a policy without paying back the loan. There can be a fine line between prudent borrowing and stripping the value to the point where coverage collapses.

Guaranteed universal life has certainly been in vogue over the past few years. With this product, a desired length of coverage can be obtained, age 88, 93, 105––whatever the insured desires. This can be a very palatable solution, emulating term coverage for whatever longevity an insured deems appropriate.

There are also solutions available that allow an insured person who is concerned about leaving a large lump sum to someone who might not be able to manage it in the best way.  Settlement options exist that allow a beneficiary to receive a lump sum at the passing of the insured, then collect income payments for a specified period with perhaps another lump sum at the end of the income stream.

Finding the best blend of options can remove most of the “what ifs” from any financial plan and create a sense of well being with a platform from which to build financial success in a family’s planning.

None of these issues are new and one need not be a rocket scientist to design a successful platform for a financial plan. However, when it comes to mortality, it seems as if the natural instinct for a family is to dodge the hard questions unless a trusted advisor assists in bringing the issues to the forefront.

As life insurance professionals, it is incumbent upon us to help clients peel back the layers of uncertainty and motivate them to build the base for a successful financial plan.  Our objective is to bring peace of mind and confidence to our clients, while they build their future and ensure that their goals will be met if they follow a well thought out plan.

Jeff Watkins is a brokerage manager at First American Insurance Underwriters in Needham, Mass. He can be contacted at 800-444-8715 or [email protected].