Adults, are you counting on your parents to support you if something happens? And parents have you thought about what would happen to you financially if something happened to one of your adult children?
I’m a parent so I know full well that most, if not all, parents would help their children out financially if something happened to them such as the loss of a spouse or a disability in their family.
Far too many individuals do not have the proper amount or types of life insurance and disability insurance. Too many individuals avoid accepting that something could happen. And too many people think their company benefits are sufficient even though most do not really know how much or what type they have or limitations therein.
It is critical that adults be adequately insured. If not and something happens it could prove financially devastating not only to the ‘adult’ but to the parents of the ‘adult.’ We know that people don’t usually like discussing these potential life events and nobody wants to pay for something they may never use…but the problem is that based on statistics, there is a really high probability that such things might happen.
Risk management involves identifying potential threats and analyzing the likelihood and financial effects of the occurrence. Options include self-insuring and/or transferring the risk to an insurance company. Even our wealthiest clients choose to transfer risk to insurance companies as they realize the benefits of paying a small amount so that if the event happens, the insurance company pays the large amount.
In dealing with insurance, it must be done in advance, before it is too late to have options. A proper analysis must be done. Everyone’s situation is different so there are no magic formulas for determining how much insurance is needed. Then once the amount of insurance has been determined, the next step is to consider what type of insurance is best suited for the individual. It’s very important to work with highly rated insurance companies so that there is confidence that a claim would be paid if God forbid something does happen.
Our firm does comprehensive financial planning so one of the first things we do is an insurance analysis. We love helping our clients with their investments but our first goal is to be sure that if an event occurs, it does not completely derail their financial planning.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through IHT Wealth Management a registered investment advisor and separate entity from LPL Financial.
