Life Insurance and Financial Planning
So what does Life Insurance and Financial Planning have to do
with Disaster Preparedness?
The US is regularly hit by hurricanes, floods, earthquakes, wildfires,
tornadoes and other natural disasters.
While there is no way to guarantee you or a loved one will never get hurt
by a natural disaster, you can protect your family from the financial consequences.
While we hope you do not die in a natural disaster, there are other types
of disasters - these can happen in buildings, in vehicles on the highway,
and so many more possibilities.
What if you do not die, but become disabled and cannot work?
How will you pay for medical bills let alone daily life debts such as rent
or your mortgage, utilities, food, clothing, school for your children ...
the list goes on.
While life insurance cannot prevent natural disasters from occurring,
it can prevent your loved ones from being unable to pay the bills if something happens to you.
Insurance vs. Assurance
The specific uses of the terms “insurance” and “assurance” are sometimes confused.
In general, in jurisdictions where both terms are used, “insurance” refers
to providing coverage for an event that might happen (fire, theft, flood, etc.),
while “assurance” is the provision of coverage for an event that is certain
In the United States, both forms of coverage are called “insurance” for reasons
of simplicity in companies selling both products. By some definitions,
“insurance” is any coverage that determines benefits based on actual losses
whereas “assurance” is coverage with predetermined benefits irrespective
of the losses incurred.
Life insurance may be divided into two basic classes:
Temporary and Permanent;
or the following subclasses:
term, universal, whole life, and endowment life insurance.
Life-based contracts tend to fall into two major categories:
~ Protection policies:
These are designed to provide a benefit, typically a lump sum payment,
in the event of a specified occurrence.
A common form—more common in years past - of a protection policy design
is term insurance.
~ Investment policies:
The main objective of these policies is to facilitate the growth of capital
by regular or single premiums.
Common forms are whole life, universal life, and variable life policies.
What are some of the services available to help in case of Disaster or
Emergency Medical situations?
What type is right for you and your family?
It all depends on your individual situation.
Part of your Family Planning is getting together with your insurance agent
and having a review.
Every time your life "changes" (this includes changing jobs, getting married,
having a baby, retiring , and other milestones)
- Juvenile policies:
General savings, college savings, tax free asset allocation for the future
(ie. down payment on home, education, vacations, car etc...)
- Asset Allocation/Pension Maximization:
Creating a financial arm free from the IRS by accumulating tax deferred savings
and accessing tax free contributions. (Ideal for government workers)
- Mortgage protection:
Mirroring a life insurance policy with the size of the current mortgage
in order to pay off mortgage in the event of the insured's untimely death.
- Retirement funding:
Making sure that a clear goal is established for what lies ahead by not spending more
but repositioning what you already have.
- Fixed Annuities:
Creating a pension to guarantee a consistent paycheck for the rest of your life.
- Long Term Care:
Three out of four people experience a long term care incident after retirement.
LTC is there to soften the impact on medical bills, recovery and surrounding family and friends
should they be the ones taking care of you.
Insurance agents are there to help you determine the best coverage
for you and your needs. Ask the hard questions.
Make sure you understand the policies you have and what they do and do not cover.
Financial advisors have to complete specific training and hold a license to provide advice.
In the United States a financial adviser carries a Series 7 and Series 65 or Series 66 license
and according to the U.S. Financial Industry Regulatory Authority (FINRA), license designations
and compliance issues must be reported for public view.
FINRA describes the main groups of investment professionals
who may use the term financial advisor to be: brokers, investment advisers, private bankers, accountants, lawyers, insurance agents and financial planners.