Right now is a great time to assess your insurance coverage. Insurance is a means of protecting your assets against premature liquidation. When a loss occurs, the assets you've worked hard to attain face liquidation if your insurance coverage isn't enough. It's always possible to strengthen your current insurance coverage or purchase new coverage. The insurance review and planning process is unique to each individual but has three parts for determining how much insurance coverage you need:
- Risk Identification
- Risk Measurement
- Risk Administration
To help mitigate your risk of loss, financial professionals assess your life insurance, disability income insurance, and long-term care insurance policies to help ensure you're appropriately covered for your situation.
Life insurance- The idea of life insurance can feel daunting, but the meaning is simple: life insurance helps protect your family from financial hardship if you pass away unexpectedly. Life insurance can help your family provide for lost income, cover bills and debts left behind or funeral expenses, and potentially help pay for living expenses for your family for some time. If you have a spouse or dependents, life insurance is a great way to help protect the people you love. Here are some ways to evaluate your need for life insurance:
- If you have a spouse
- Whether you have kids
- If you have debt
- If you do not have enough money to cover your debts and expenses related to death—your funeral, estate, attorney fees, and other costs.
You might need life insurance if you answered "yes" to any of the above scenarios. If you already have life insurance, it's essential to make sure you have enough death benefits. Also, if you insure through work, your policy may not be portable or expire at a specific age. Having the appropriate amount of coverage for your situation is essential.
Disability income insurance- As you age, the likelihood of an injury resulting in permanent disability increases. Often, people think that Social Security Disability Insurance (SSDI) would replace their income if they become disabled. However, SSDI will only pay part of your lost wages if you become permanently disabled, which may not be enough to cover your monthly expenses. Purchasing a disability insurance policy can help protect against lost wages.
SSDI is a social insurance program under which workers earn benefits coverage by working and paying Social Security taxes. The program provides benefits to disabled workers and their dependents.
Long-term care insurance (LTCI)- LTCI pays for the cost of long-term care needs that Medicare does not cover. It can help with expenses like nursing home care, assisted living, adult daycare, in-home care, home modifications, and care coordination.
As you age, (LTCI) is a vital part of financial planning. An LTCI policy can give you the peace of mind of knowing that if you face an illness or disability as you age, you can afford the care you need. Also, your children and other family members won't have to deal with the significant expenses that may come with your long-term care.
Here are other insurances you may want to review, depending on your situation:
- Home owner's insurance
- Renter's insurance
- Auto insurance
- Health insurance, including dental and vision
- Electronics insurance
- Identity theft insurance
Your financial professional can help you make sense of the complicated world of insurance and help you assess all of your coverages. It's essential to make sure you have enough coverage, so reach out to your financial professional to schedule your insurance review today.
This material contains only general descriptions and is not a solicitation to sell any insurance product, nor is it intended as any financial advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Fresh Finance.
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