The economy has most of us looking hard at our personal finances. Even if you’ve come through these difficult years without a layoff or other huge financial hit, you may have gone a few years without a raise or lost some of your benefits. Even these seemingly small differences in income can have a huge impact on your finances over time.
As you look ahead to the future and rethink your financial options, you’ll also want to take a close look at your insurance. Insurance and financial planning dovetail beautifully, giving you more complete peace of mind. Being sufficiently insured is also the most responsible decision you can make for yourself and your loved ones.
While financial planning is most closely associated with life insurance, all your insurance policies work together to protect your financial future.
- Medical insurance is about more than cutting costs on those regular trips to the doctor. If you suffer from an unexpected accident or are diagnosed with an illness that requires long-term treatment, sufficient medical insurance is critical. Even if insurance doesn’t cover all your expenses, it will at least cap the cost—giving you a vital piece of information as you plan ahead.
- Auto insurance provides some coverage of unexpected medical expenses after an auto accident. It also provides you some financial protection if you’re at fault in an accident. Meanwhile, if your car is totaled in an accident, your insurance will mitigate the cost of a new vehicle, preventing a huge (and unexpected) new expense.
- Short- and long-term disability insurance: If you fall ill or have an accident that makes you unable to go to work, these insurance policies will help make up for your loss of income. The insurance generally won’t entirely replace your regular paycheck, but it’s often a sufficient stopgap.
- You’ll want to talk to you insurance agent about all these different insurance policies, in addition to reviewing your life insurance policy options. Prepare for the meeting by writing down a list of questions and putting together an outline of your current financial plan. If you have any concerns about that plan, now’s the time to ask! Your insurance agent can clarify all the different financial planning tools available to you and explain the advantages and disadvantages of each one.
It’s important to remember that your financial planning strategy should change over time. As we age, we should invest more conservatively; the closer you are to retirement, the more you need that principal amount. Talk to your agent about shifting your portfolio into more conservative investments over time, and discuss how “hands-on” you’ll want to be about managing your portfolio.
With the right financial plan and corresponding insurance coverage, you can rest assured that your family is protected for the future.
