How Much Will You Make? Part Two
Last article we discussed the importance of establishing your Family Financial Plan. The question that you must ask yourself is "What have I done to prepare for financial success?" Have I done anything? When will I begin a Family Financial Plan?
There are three Roadblocks to Financial Success. They are:
1-Inflation
2-Taxes
3-Procrastination
There are six keys to Financial Success. They are:
1-Risk Management
2-Cash Management
3-Investment Planning
4-Tax Planning
5-Retirement Planning
6-Estate Planning.
A well-designed risk management program may help protect you against disaster without burdening you with payments for protection you don't really need. Prudent investors must be willing to cover the cost of minor financial setbacks themselves.
Insurance is not meant to insulate you from the cost of every head cold or automobile fender bender. The idea is to protect you from catastrophe, not to improve your standard of living by filing a claim.
So the question is "Are You Properly Insured?"
As many as 67 percent of the homes in the United States are underinsured.
Consider the following:
a) Fewer than 40 percent of workers have long-term disability insurance through their employer and only two percent buy it on their own.
b) About one-third of all nursing home costs are being paid out of pocket by individuals and their families.
c) These are just a few of the startling statistics that many people are not aware of.
The Risk Protection that most people need to be concerned
with and to "do" something about are:
1-Medical
2-Long-Term Care
3-Property & Casualty
4-Liability
5-Life
6-Disability
We will go into each of these areas in more detail later on but will briefly discuss them each now.
There are three broad types of health care coverage: preferred provider organizations (PPO), health maintenance organizations (HMO) and indemnity plans.
Medicare is an important area to protect yourself with if you're over age 65.
Long-term care is one of the greatest risks faced by Americans today. Currently, 44% of individuals age 65 and over can expect to spend time in a nursing home or have home health care required.
Disability Income Insurance is an area that is neglected by most working Americans. This type of insurance helps replace income lost because of accident or illness.
With Property & Casualty Insurance, we typically think of homeowner's and automobile insurance. Homeowners need protection against liability and theft of or damage to their property. The majority of Americans drive cars and automatically insure them. The areas of protection in an automobile plan are: a) liability, b) uninsured and underinsured, c) collision and comprehensive, d) medical payments and e) personal injury protection.
Life insurance has many purposes. Whether wealthy or not, there is always a need for life insurance. The primary purpose is to protect your dependents financially in the event of your death. Used properly, life insurance is a great blessing to many families in their time of need.
With any of these areas, you must be wise in your decisions. You can pay too much and you can pay too little for the protection that you and your family need for your Family Risk Management. It is vitally important that you do hours of research or simply visit with someone that is an expert in the Risk Management area.
The bottom line is that you need to take the first step of your Family Financial Plan with your Risk Management analysis. Get the plan going!!!! You, and your family, will feel such peace knowing that a plan is in effect.
Good Luck.
Scott L. Overstreet, RFC, LUTCF Visit Scott's Simple Joe Page @ http://www.simplejoe.com/scottoverstreet.htm