Although unaware, most individuals are very familiar with risk management in the form of auto insurance, home owners insurance and life insurance.  Some states even require (by law) that motorists MUST maintain some level of auto insurance.  So, if an individual’s most valuable asset is their ability to earn an income, why do so many individuals and small businesses expose their most valuable asset to death and disability?

The three most common risks are:

Risk Management is identifying a potential risk that if experienced, would hinder your ability (or your family’s) to meet your financial obligations and goals.  There are two ways to manage risk, 1) self-insure with your existing assets, or 2) transfer the risk to someone else.  Most individuals choose to transfer the risk to an insurance company in the form of life, disability or long-term care insurance.

When evaluating risk, we analyze your current financial situation to determine if you have an insurance need.  The most appropriate starting place is to review benefits available through your employer.  Group benefits are typically the most cost effective approach to insurance.  As necessary, we augment your group coverage with individual insurance.  As an independent representative through Purshe Kaplan Sterling Investments, we have non-propriety insurance products across all platforms of coverage to meet our client’s needs allowing us to identify the policy that best fits you.

The three main types of insurance are:

• Life Insurance – will your family be able to meet their goals if you were not there to support them?  Through life insurance, you are able to have confidence that your family will not have to worry financially after you are gone.  We work with you to determine what type of insurance as well as how much is necessary to guarantee your legacy.
• Disability Income Insurance – as stated above, your ability to earn an income is your most important asset.  What would happen if you were unable to work for six months, two years, indefinitely?  By having proper Disability Income Insurance in place, you can help protect your assets and still have income to pay your expenses each month.
• Long-Term Care Insurance – according to Metlife’s Market Survey in 2005, the average annual cost of long-term care is $74,095 a year.  Additionally, a public opinion poll conducted by the Kaiser Family Foundation estimates that a more than 40% of people who turn age 65 in 2010 will need some degree of long-term care.  As you age, the cost of insurance becomes increasingly more expensive.  We urge our clients to start thinking about and discussing their options between the ages of 48 to 52 and determine if long-term care insurance should be part of their financial plan.