Every day at work, you try to earn an income to take care of the people you love. Unpredictable events such as death, disability or illness, however, may disrupt your ability to do so. This is why risk management planning, or insurance planning, is a valuable aspect of financial planning.
Perhaps your employer provides you with a group benefits package. While it’s a good place to start, the coverage it provides may not be a good fit with your family’s needs. We can help you review your current benefits package and see how you could benefit from additional coverage, if needed.
Some insurance needs, for instance, are:
- To pay off credit cards, mortgages, loans, etc. Debt protection shields your heirs from paying off loans you may have incurred from your creditors in case of death.
- To make up for lost income. Your insurance plan should include income replacement, in case death, disability or illness impairs your ability to earn income and decreases your household’s spending capacity.
- To pay for your estate taxes. Your heirs may not be able to fully benefit from the assets that you pass on to them if they cannot afford the taxes that come with their inheritance. Make sure that this is also covered by your life insurance plan.
- To give back to society. Some insurance plans may also allow you to set aside a certain amount for charity.
- To leave something behind for your loved ones. Even if you don’t have a lot of assets to eventually leave behind, you can still leave an inheritance for your heirs when you pass on. Through a life insurance policy, your chosen beneficiaries can receive cash benefits tax free, depending on the type of insurance you purchase and how much you have insured. You may choose from a term, permanent, or universal life insurance policy, depending on your needs.
- To protect your assets from creditors. Asset protection protects your essential assets, such as your house and vehicle, from being liquidated by creditors. This, of course, can only be done before the need to liquidate arises and is subject to existing bankruptcy laws.
Before signing up for any life insurance products, make sure to do enough research and find out which features and plans are fit well with your needs.