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Planning beyond yourself: How insurance can save your loved ones from a heavy burden

Next weekend we officially enter the fall — one of the best times of year that ushers in football, fire pits, and the beginning of the holiday season. As you watch the leaves turn brilliant red and orange and begin to blow to the ground, it’s easy to appreciate the natural beauty of the end of another life cycle before the cold winter months.

It’s much harder to appreciate nearing the end of our own life cycles. As a matter of fact, most of us probably avoid thinking about it altogether. And that’s perfectly understandable. None of us wants to consider that one day we won’t be around anymore and our loved ones will be left to pick up the pieces. Heck, I’m sorry for even bringing it up today. But it’s just the reality of the human condition. 

Fortunately, there are ways to protect those we love from having to make hard decisions during times of sorrow. It’s rarely an easy conversation to have, but a big part of my role as a financial planner beyond managing their finances is to help them pass it along to their future generations after they’re gone. 

Today I want to talk about three ways that you can give your loved ones the gift of insurance to ease the financial burden.

Life Insurance

The clearest measure you can take to ensure that your family will be taken care of is to have an appropriate life insurance plan. Your life is your greatest asset, and, as we know all too well, it can come to an end at any time. 

I’ve seen over and over how families are taken care of by life insurance, and I’ve heard heartbreaking stories of families who weren’t covered or weren’t adequately covered and were left with a heavy financial burden on top of their emotional one. Life insurance can be very affordable and is the single greatest way to protect those left behind.

Disability Insurance

Even while you’re still around, suffering a short-term or long-term disability can cause major financial strain, as many disabilities come with not only loss of income, but also unforeseen medical and lifestyle costs. Even so, many of the folks who come see us don’t have any kind of disability insurance, or they are severely under-covered by their workplace’s plan. 

Short-term disability insurance typically covers around 50-60% of your paycheck for up to six months, while long-term disability insurance can continue for years and even into retirement. These plans have lots of factors like elimination periods and cost-of-living increases and can sometimes be hard to wrap your head around, but they are really useful for staving off financial hardship in case of injury, major surgery, or even pregnancy. 

Long-Term Care Insurance

We tend to think of long-term care as an end-of-life service, but accidents and illness in people under 65 can also accelerate that necessity. Without long-term care insurance, you and your family are on the hook for paying these costs out of pocket, and they can really eat into your assets like retirement and real estate the longer they go on. 

Not enough of us in our 50s are considering what it might be like to have to have in-home care for 20, 30, or even 40 years in the event of serious health changes. Making a small investment in that possibility now could save you a tremendous amount of money in the long run.

Now, not all of you will qualify for some of these options that I’ve mentioned. You may have a pre-existing condition or even a risky job or lifestyle that insurance companies won’t cover. 

If that’s the case, you can still plan ahead for the unthinkable. There are other options for saving for these major life events that we would be more than happy to help you navigate. It might mean really reining in your budget, but is there any greater gift that you can give to your loved ones than to have your finances ready when it’s their turn to take care of you? 

You may not even know what your company’s coverage looks like. We can help you with that, as well. Just get in touch with me or anyone else on my team today so that we can help you give that gift.

Article by David Smyth, CLTC, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.

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