Imagine you have spent the day at work, endured a tiring commute home, enjoyed a warm meal with family around the dinner table and now have a little free time before the day ends, only to start all over again tomorrow. Do you use that free time to research the best insurance policies you should obtain? Even as a financial planner, that sounds like the last thing I want to do! We know it’s important, but the routines of daily life cause us to procrastinate. Below are bite-sized steps to help you move forward with this critical project.
- Identify the results of the status quo. Not making a decision is, in itself, a decision. So, what would happen if a disability, death, or long-term care event occurred? Take inventory of the coverage you currently have and don’t have. Perform an honest, if brutal, assessment of those outcomes and determine what your current protection looks like. For example, a husband may have life insurance through work, but the wife who stays home to care for the children might not have any life insurance. If something happened to her, it could be devastating, not just emotionally, but financially, as the children would need childcare, which can quickly become expensive.
- Notice specific areas of need. Every situation is different, so take a realistic look at yours to spot any gaps in your current coverage. What risks do you face? Evaluate which areas of your financial life are protected, and which are not. For example, does your disability insurance cover your essential monthly expenses, or would you need to tap into savings if something happened to the breadwinner? How many years are left on your term insurance policy, and will you be insurable at that time? Will you still need insurance then? The goal is to pinpoint the real risks you want to protect against and allocate your resources accordingly. Over time, it is easy to forget the originally chosen terms. Reviewing your insurance policies every couple of years will help avoid any misconceptions and provide an opportunity for updates before an unexpected event occurs.
- Review your options to fill the gaps. Now that we identified where you are most vulnerable, let’s consider potential solutions. Keep in mind, this doesn’t always mean adding more insurance coverage. For example, when thinking about long-term care, review the available care options and their respective costs? Are there local family members who might be willing to help? Do you prefer to stay in your house and hire care, or would you rather move to a care community? Can you self-insure? These questions will guide you in determining how much, if any, long-term care insurance you need.
- Connect with trusted sources. Now that you know the gaps and the potential solutions, it is time to implement. Contact your advisor for their experienced perspective, and they should be able to connect you with a reputable insurance broker. Just like your investment portfolio, you should work with an insurance agent you trust and can explain your coverage in a way you understand. Collaborating with others also creates accountability, ensuring that the needs you have identified will be addressed when an unexpected or unfortunate event occurs. In the end, the goal of insurance is to provide protection and peace of mind, so that life-changing events don’t lead to financial ruin.
Life gets busy with the day-to-day activities, so focus on one step at a time. Remember, the main goal is to have a protection plan for you and your loved ones. If you’re not already working with an advisor and would like help crafting your protection plan, contact us and we would be happy to help!
Disclosures:
Apella Capital, LLC (“Apella”), DBA Apella Wealth is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered or excluded or exempt from registration requirements. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, product or any non-investment-related content made reference to directly or indirectly in this material will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may not be reflective of current opinions or positions. Please note the material is provided for educational and background use only. Diversification seeks to improve performance by spreading your investment dollars into various asset classes to add balance to your portfolio. Using this methodology, however, does not guarantee a profit or protection from loss in a declining market. Past performance does not guarantee future results. All data is from sources believed to be reliable but cannot be guaranteed or warranted.
No current or future client should assume that any discussion or information contained in this material serves as the receipt of, or as a substitute for, personalized investment advice. As with any investment strategy, there is the possibility of profitability as well as loss.
Apella Wealth does not provide insurance and nothing either stated or implied here should be inferred as providing such services.