Make Insurance Part of the Plan this National Insurance Awareness Day
“Insurance – whether it’s life, disability or for long-term care – is an essential, but often forgotten, aspect of a financial plan,” says Forbes. “Individuals delay dealing with death, illness, injury or other losses as these are not fun topics to confront, but incorporating insurance into a financial plan not only helps prevent possible losses, it helps protect the income that makes other aspects of a financial plan possible.”
To help think about insurance and its importance to a financial plan, Forbes outlines three positive considerations:
- Insurance protects what we value. While health, homeowner and automobile insurance are viewed as necessary and, in some cases, required by law, other types of insurance such as life and disability are not. That doesn’t mean they aren’t important and shouldn’t be overlooked as they can provide funds due to loss of life, income, assets or future earning potential. If a working individual passes away or becomes disabled, their surviving family members lose the steady flow of income they were earning. Obtaining insurance will ensure that individuals and their families have a safety net in case the unthinkable occurs.
- Life insurance policies can pay tax-free benefits. How can you protect your family? Often, some kinds of life insurance are considered a form of savings or investments. The biggest benefit is that beneficiaries receive proceeds free of taxes. This differentiates them from beneficiaries of traditional retirement plans, IRAs and variable annuities.
- Without insurance, you’re self-insured. Are you able and prepared to self-insure? If not, that is where insurance should come into serious consideration. It is a good practice to be aware of what your coverage is and what it will protect you against, regardless if it is ever used.
Read Forbes’ full blog post with more details.
For more guidance on how insurance fits in a financial plan, talk to a CERTIFIED FINANCIAL PLANNER™ professional today or visit www.letsmakeaplan.org.
Certified Financial Planner Board of Standards, Inc. is the professional body for personal financial planners in the U.S. CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services – so that the public has access to and benefits from competent and ethical financial planning. CFP Board, along with its Center for Financial Planning, is committed to increasing the public’s awareness of CFP® certification and access to a diverse, ethical and competent financial planning workforce. Widely recognized by firms and consumer groups as the standard for financial planning, CFP® certification is held by more than 83,000 people in the United States.