By: Michael Relvas, CFP®
Perhaps the more pertinent question should be, why is your financial planner NOT talking about insurance? Although it may not be one of the more exciting areas of planning, insurance helps protect a person's assets and loved ones from financial hardship, making it a critical part of any sensible financial plan.
It is all too common that financial advisors focus solely on investment management, leaving a number of gaps that could create financial distress in the future. In order for a financial plan to truly be comprehensive and address all of an individual's needs and goals, it must also address risk and the options available to manage those risks. Below is a list of the top five insurance policies you should know about to help protect your family's finances.
Disability Insurance
Disability InsuranceCommonly overlooked, disability insurance provides income protection in case an injury or illness prevents you from working. For every month that you qualify under the definition of total or partial disability, the insurance company pays you a monthly benefit that can be used for living expenses, retirement savings and maintaining a similar quality of life for your family. Considering that every aspect of your financial world relies on your ability to earn an income, protecting it, should be a "fairly" important category to consider.
Life Insurance
There are many different types of life insurance policies available, each of which provides its own unique benefits. For purposes of this article however, the focus is simply on the need for financial protection against a premature death and liquidity needs for expenses at death. The unexpected death of a household's primary income earner could cause irreversible financial hardship and life insurance can be an efficient and effective solution to managing this risk.
Personal Property & Liability Insurance
Two very important types of insurance, Home and Auto insurance are more so a requirement than optional insurance coverage. Sadly however, most individuals simply look for the least expensive policy they can find. The truth is that both personal property and liability insurance could protect your family's property and finances from tremendous hardship, but only if the appropriate levels and types of coverage are used.
Without the proper insurance planning, an individual's or family's financial plan is susceptible to a number of catastrophic risks. It is critical that your financial advisor properly address these risks with you in order to implement the appropriate risk management techniques for your situation.
Michael Relvas is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 1901 Research Blvd, Suite 400, Rockville MD 20850. Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor, 240-683-9700. Financial Representative, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. MR Insurance Consultants is not an affiliate or subsidiary of PAS or Guardian.
PAS is a member FINRA, SIPC.
Neither Park Avenue Securities, The Guardian Life Insurance Company of America, nor any of their affiliates or subsidiaries endorses or has any direct or indirect responsibility with respect to the following activities: Personal Property and Liability Insurance.