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Who are you thankful for this Thanksgiving? You likely have some relationships in your life that are extra meaningful. Perhaps you're thankful for a spouse or partner? Or maybe your children? Or perhaps siblings, friends, or even coworkers?
Do any of those individuals rely on you for financial support? Do you have a spouse who relies on your income? Or perhaps minor children who depend on your financial means?
If so, this may be a good time to not only reflect on how much you appreciate them in your life, but also how their life may be impacted if something were to happen to you. It’s never pleasant to think about negative things that could happen in our lives. However, a failure to plan for possible threats could leave your loved ones exposed to risk.
Below are three common risks that can disrupt a family and create serious financial hardship. If you haven’t planned for how to protect your loved ones from these risks, now may be the right time to do so.
Death is inevitable. It’s also unpredictable. It’s never fun to think about your own passing, but it’s also unwise not to do so. At some point, you will pass away. If that happened sooner rather than later, how would it impact your spouse, children, or others who rely on you for financial support?
Life insurance can be an effective way to manage the risk. You pay premiums in exchange for a certain amount of death benefit paid to your beneficiaries upon your passing. Your premium is based on a wide range of factors, including the type of policy, the death benefit amount, your age, and your health.
Life insurance also doesn’t have to be expensive. One way to keep the cost down is to use term insurance, which provides coverage for a limited period of time, like 15 or 30 years. After the period ends, you can renew the policy or let it lapse. This can be a cost-effective way to protect loved ones temporarily. For example, you may use term insurance to provide financial support while you have minor kids in the home.
More than 25% of all adult workers will suffer a disability at some point that keeps them working for a year or more.1 What would happen to your loved ones if you were unable to provide income for an extended period?
Disability insurance mitigates this risk by providing income if you are physically unable to work. There are two-types of disability insurance: short-term and long-term.
Short-term coverage provides financial support for a limited period of time, like several weeks or months. Long-term coverage can provide support for a year or even longer, depending on the terms of your policy.
Many employers offer disability coverage as part of their benefit program. However, it’s possible that your employer plan has gaps in coverage. For example, it may offer only short-term protection or it may only provide coverage for specific types of disability.
If you haven’t reviewed your disability protection, now may be a good time to do so. It’s possible that you, and by extension your family, are exposed to risk. A financial professional can help you implement the right risk mitigation strategy for your needs and your budget.
Long-term care is a very real possibility for many seniors. Those turning 65 today have a 70% chance of needing long-term care at some point in the future. On average, women need long-term care for 3.7 years and men need it for 2.2 years. Much of the discrepancy is due to women having a longer life expectancy than men.2
Unfortunately, long-term care can be costly. In 2019, the average monthly cost for an assisted living facility was more than $4,000. Even in-home care services average more than $4,200 a month. Very often, these costs aren’t covered by Medicare.
Long-term care insurance can help you, your spouse, and your family manage the cost. You pay a premium and then the insurer pays some or all of your long-term care expenses. Most policies even cover in-home care. You can often choose among a wide range of coverage options to tailor the policy to fit your needs and budget.
This is the time of year to reflect on those you appreciate the most. It’s also a great time to evaluate your risk strategies so you can better protect those who are most meaningful to you. Let’s develop your risk protection strategy. Contact us today at Cornerstone Financial Associates so we can start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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