A Good Financial Plan includes Insuring against the unexpected. Are you covered?

When it comes to creating a sound financial strategy, many people think of creating a diversified portfolio or making sure they’re regularly contributing to their retirement plan. However, making sure that you are protected against the unexpected and ensuring that no matter what happens, you're covered.  That's why including certain insurance should be part of your financial plan.  

If you’re on the younger side and have a lot of life ahead of you, you might wonder why you need to consider disability insurance or life insurance. Yet the point of insurance is to expect the unexpected and make sure that you've taken care of yourself and your family if something happens to you.

Each type of insurance has specific coverages and restrictions, and some types of insurance make more sense than others, depending on your age. Your financial advisor will work with you to ensure that the right type of insurance is a part of your strategy.  Also, if you already have certain insurance policies, your financial advisor can review to make sure you are covered appropriately.

• Property insurance may be considered homeowners insurance, renters insurance, or insurance against a specific natural disaster, like flood or earthquake insurance. Property insurance typically covers the building itself and the contents within it should something happen. A rental policy will cover your possessions as a renter should something happen to your building. TIP:  If you have a college student you are supporting, renters insurance may be a very worthwhile option when there may be multiple roommates with access to your student's belongings.  You’ve spent a lifetime building up your possessions; if everything were lost tomorrow, you wouldn’t want to outlay the funds to rebuy everything you own.¹
• Life insurance provides financial support to your loved ones after you’re gone. You pay a premium, normally monthly or annually, and it pays a death benefit to your beneficiaries after you’re gone. Death benefit money can be used to pay funeral expenses, mortgage or rent payments, and day-to-day living expenses.  If you are younger, don't be tempted to overlook life insurance.  It should be a part of everyone’s financial plan if they have people depending on them financially.²
• Disability insurance protects you if you become disabled and are unable to work. Think of disability insurance as insurance for your income. The two types of disability insurance—short-term disability (STD) and long-term disability (LTD)—are typically offered as part of or in addition to your insurance options provided by your employer. STD typically covers periods of injury or disability from 13-26 weeks, while LTD usually offers several years of continuous income replacement after a work-ending workplace injury. However, these policies only typically cover a percentage of your previous income. Still, having at least some of your income covered is better than nothing.³   Your financial advisor can help you decide if you want to add it to your benefits package.
• Extended care insurance is sometimes referred to as long-term care insurance, and is designed to help cover you after age 65 in the event you require in-patient or at-home care for a chronic condition. Extended care insurance can cover nursing homes, assisted living facilities, home health aides, and private-duty nurses. Extended care insurance is also less expensive the younger you are, so if you’re approaching 50, it’s something to start considering.⁴

Insurance should be an essential part of your life and financial strategy. By preparing for the worst (while hoping for the best), you’ll be able to handle any changes in your life and provide yourself with some protection against significant disasters or illnesses. Remember, you can’t control everything that happens in life, but you can create a plan that will support you no matter what.