Protecting Your Family
Protecting Your Family is a Top Priority
Life insurance is essential for every family as the death of a bread winner can be financially devastating to a surviving spouse and children. The benefits from a life insurance policy are generally received free of income tax and can be used to pay off a mortgage and other debt, create monthly income to support the family’s lifestyle and fund college for children or grandchildren.
Stay at home spouses play a vital role in the family and they also need life insurance. Who will do the things the stay at home spouse does, if they can no longer do those duties? If this is going to involve outside resources to take over these responsibilities, where will the funds come from? Very often the working spouse will want to take time off of work to grieve and be with the children. Life insurance on the at home spouse would provide the financial resources to make this possible.
Most of us know someone who had a severe illness or injury during their working years. Have you ever thought about what would happen if you were not able to work for 6 months or much longer? Would you be able to support your family’s current lifestyle or would you need to start selling your assets to cover basic expenses?
These questions deserve serious consideration when the Social Security Administration statistics show that One in Three Americans between the age of 35 and 65 will become disabled for more than 90 days and One in Four 20 year old will become disabled before they retire. Disability Insurance protects your paycheck and provides you with monthly income when you cannot work.
Some employees are fortunate to have an amount of Short Term (STD) and Long-Term (LTD) disability insurance provided by their employer. For highly compensated employees however, the group amount may not be sufficient in relation to their earnings. It would be prudent to supplement their group coverage with an individual policy.
But sole proprietors and small business owners are typically on their own. They should consider two types of disability insurance policies:
- An Individual Disability policy customized to their specific income needs. Premium discounts are available when 3 or more people who work for the same company purchase policies.
- A Business Overhead Expense policy that would provide monthly income to your company to keep your business open and retain your employees and customers. It provides the cash flow needed to pay your office rent, utilities and employee salaries in your absence, so you have a practice to come back to.
Long-Term Care Planning
People put sophisticated plans in place to support their lifestyle during retirement. These plans are designed to create an income stream to pay everyday living expenses. As we age however, our reality is that our medical costs will increase.
Let’s say you have retirement income of stream of $7,000 per month to cover living expenses for the remainder of his your life. But with the average cost for home care and assisted living approaching $7,000 per month, paying for long-term care services could quickly consume your income and you may need to liquidate other assets.
However, a long-term care insurance policy with a $7,000 monthly benefit can provide extra funds to help cover the cost of LTC services, leaving your retirement income to pay daily, weekly and monthly bills as planned. This preserves the assets that generate your income.
A long-term care plan protects your family because it…
- Communicates where you would like to receive care and who would provide it
- Identifies what financial resources would pay for your care
- It eliminates confusion and conflict amongst family members
- And it enables your family to supervise your care rather than provider care