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Preparation is Key

Preparation is Key

| March 14, 2019

"Preparation is key", maybe you say that to your children as they mention an upcoming exam or soccer game; but the same goes for us adults as we examine our finances in regards to potential accident costs or end of life family care.  When I was younger I heard the phrase, "you can't cheat death or taxes" and unfortunately it's proven to be true!  Accidents, illnesses, and unexpected events happen every day all around us and it's our job as responsible adults to prepare for the implications that those events will have on our immediate family.  So, what can we do to protect our spouse and children from essentially the unexpected happenings of life?  The answer is to prepare and become insured.

When tragedy strikes, insurance can provide sufficient funds to cover the family costs of everyday living.  Team up with your financial advisor and find an insurance policy that will meet your family's unique needs.  For example, both term and permanent life insurance policies pay out a lump sum upon your death, but the policies do have differences and you might benefit more from one than the other.

Term life insurance provides a level premium and a level-death benefit for a stated period of time, such as 10, 20, or 30 years.  Your premium is also fixed and you may have to have a medical examination to qualify.  Term insurance does not build cash savings, so at the end of the term the policy will have no value.  Term insurance can be a good choice for younger individuals or families who need protections against the loss of income from a primary earner in the household.

Permanent life insurance provides both a death benefit and cash savings.  The policy owner may also be able to borrow against it tax-free.  Unlike term, depending on your plan your premium can vary during the life of the policy.  The premiums are initially higher than for term coverage. 

I recommend sitting down with your advisor to decide on the best plan for you and your family.

I know we don't like to think about who will pay for our funeral expenses and mortgages if something were to happen to us, but preparation is key right?

*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  All investing involves risk including loss of principal.  No strategy assures success or protects against loss.