5 Insurance Products for Every Generation
When people come to our offices, insurance strategies are not often at the top of the list of things they want to talk about.
We think of insurance as the unsung hero of financial planning: it might not be exciting or even feel particularly pressing, but having appropriate insurance coverage in place can help you protect what you’ve built and give you a leg up for the future.
In this article, we’ll cover some of the basics of insurance, including policies that are often used as part of a broader goals-based financial plan.
Just remember that not every insurance product or feature is right for every individual, making it important to have a clear understanding of your needs and the details of the policies you’re considering.
It’s a basic, and yet sometimes we go without it. Of course, those of us who are older or have health problems tend to prioritize health insurance coverage as a matter of course – in many cases, it’s the younger generation you may need to keep an eye on.
Many people in their 20s and even their 30s don’t put enough focus on health insurance coverage. They’re healthy, right? But we advise clients to check in and to help their kids understand the need for appropriate coverage, even if it’s only for emergencies.
A sudden need for medical care by a family member can decimate a family’s overall finances, as few of us would be willing to withhold money in this situation. Making sure everyone is appropriately insured can help protect generations worth of family members, which is why we suggest making it a priority.
Life and disability insurance
Conversations around life and disability insurance typically begin when a child is born. After all, once you have a little one the costs of losing your job are that much more significant.
We generally advise families to consider life coverage if they have dependents or if they have special retirement or estate planning needs that could benefit from more sophisticated insurance planning techniques. Disability insurance is also generally advisable, though this can depend on your potential coverage through work and other considerations.
But life and disability insurance can also make sense for the person navigating life solo.
After all, you don’t have to have heirs to want to provide for someone, and disability insurance can be a smart choice if you don’t have significant assets to fall back on in an emergency. Few people recognize that disability is a real threat, whether it’s caused by an accident or a sudden illness. To help maintain your lifestyle, insurance coverage for these events can end up being crucial.
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In any situation, it makes sense to speak to an advisor about your coverage needs and goals before making a decision. There are costs and risks to any type of coverage, and not all policy features are the same. Speaking to a qualified professional can help.
Fixed annuities are typically thought of as a retirement planning tool, and they are indeed useful in that capacity. By providing fixed income for a time period of your choosing, annuities can help retirees plan their budgets, maintain their lifestyles, and avoid key investment risks.
But annuities can suit other financial planning goals as well, especially when it comes to estate planning.
For example, blended families sometimes face competing priorities between second spouses and heirs: spouses might want and need income to survive, while heirs would like to preserve the estate for an eventual inheritance. One way around this problem is to purchase an annuity that provides income for the surviving spouse, allowing the rest of the estate to be invested for growth.
This is just one strategic way to use annuities to benefit family priorities. A qualified advisor can help you develop your own strategies, including an assessment of whether an annuity is right for you. Remember that both fixed and variable annuities do come with costs and benefits, so it’s important to make sure that this type of strategy is suitable for your situation.
You might already have suitable insurance coverage for your home and car, but what about your family heirlooms, jewelry, and other valuables? While some insurance policies cover personal items, this coverage can be insufficient.
In other words, if you’re getting engaged or otherwise have valuables in your possession, it could be worth it to look into a dedicated insurance policy.
Generally speaking, you’ll need to go through the same process for most items:
- If it’s a recent purchase, keep the receipt
- Otherwise, have the item appraised by a reputable appraiser
- Take a photo of the item
- Ensure proper storage – that might be an in-home safe, a safety deposit box, or professional storage (wine and certain antiques not kept at home can benefit from these precautions)
At this point, you can seek out quotes for appropriate coverage. Don’t forget to read the fine print: if a policy doesn’t offer coverage for the potential risks you’re concerned about, it won’t be much help.
Long-term care insurance
We typically advise clients in their 50s and 60s to look hard at the long-term future. Namely, we talk about long-term care as a critical part of health care planning for retirement.
A need for long-term care services is a reality for many retirees, and while long-term care insurance is not a requirement – and in fact isn’t suitable for every single retiree – it can help to reduce the risk of significantly draining your assets due to long-term medical needs.
So why do you have to start thinking about it now, in your 50s? Well, most standard long-term care insurance policies require a health check, and the average person is more likely to sail through it when they’re younger.
Of course, that also means a longer period in which you’re paying for insurance that you don’t plan on using for years or even decades. It’s all about striking the right balance: the “optimal” time to seek coverage will depend very much on the individual.
We just caution against leaving it too late – trying to get long-term care insurance coverage in your 60s and 70s is a much riskier proposition, so it’s helpful to have a strategy in place for this possibility well ahead of time.
Consider getting a professional opinion about your risk factors and possible needs.
There’s much more you can do with multi-gen planning
Thinking multi-generationally can do wonders for a family’s sense of progress towards big-picture goals, and it’s undertaking that can touch on almost every aspect of your life. Download our free guide to multi-generational planning, From the Bucket List to the Bank, for useful insights on matters ranging from business ownership to estate plans and of course the family bucket list.
Our guide can help you prioritize your family’s goals and build a plan to achieve them. Download it for free today!
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