Insurance Planning

What kind of insurance do you have? What kind of insurance do you want? What kind of insurance do you need? Insurance varies from person to person and place to place. There are several things to think about once you begin your insurance planning, such as how to maintain the family income in the event of a disability or death, identifying current and future risk exposure, how to evaluate the most cost-effective manner in which to insure yourself, how to plan for the possibility of needing long-term care, and preparing an ongoing review and assessment of risk in your overall plan.

People are living longer, fuller lives, but this can be a double-edged sword. A longer life means that more years need to be accounted for, which in turn means that more money needs to be set aside. As mentioned earlier, a disability or a death in the family can have a severe impact on those left behind. A life insurance policy is a simple plan that might be able help you, your spouse, your children, or even your parents in the event that the unexpected strikes. But, life insurance isn’t the only form of insurance that can be useful. There are two other types that many people don’t normally consider, but should: long-term care and disability insurance.

While a death in the family can be painful emotionally and financially, it has a finality to it. In contrast, a severe accident that causes permanent disability requires ongoing care in addition to the trauma. Disabilities are not necessarily a burden, but they are not easy to handle. Depending on the type of care needed, it can become quite expensive, that is where disability income insurance comes to save the day. You might be the primary earner of your family unit, and if you are taken out of commission, it can lead to growing financial burdens. It is not enough to assume that your employer is covering this because most employers only cover a portion of your income, if at all. They also don’t cover bonuses or commissions, which can often be a large portion of your annual income. While the amount paid into such an insurance may vary, you have more control over the type of plan you’ll have, which can better prepare you and your family in the future.

Long-term care can be financially prohibitive. Long-term care facilities are not cheap, but this obstacle can be mitigated through careful planning. There are multiple forms of long-term care insurance, and it is imperative that all are considered before making a decision. While traditional care policies generally cover nursing home and home health care costs for a set number of years, premiums and other determining factors can increase these costs dramatically. Optional coverage for extended care can allow the policy to be used in a different manner, when unexpected events happen that require the policy to be used earlier than anticipated. Hybrid policies offer a defined death benefit and an extended, or long term care, insurance coverage plan.

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