Discover Why Protecting Your Next Egg is Equally, if Not More Important than Growing It!
Financial advisors are required to take exams, acquire licenses, and perform continuing education, with the primary objective of helping clients:
However, the harsh reality is that the large majority of the financial advisor industry tends to focus mostly on the growth component, and often overlooks the protection component. This can be very dangerous and damaging. They are neglecting to insulate clients from circumstances that could cause severe financial hardship… or ruin.
What I’ve found to be true is that the vast majority of clients I meet with who are currently working with a financial advisor are not adequately protected against unexpected events such as:
- A car accident and major lawsuit
- A critical illness
- The need for long-term care
- A major disability
- One spouse passes
- Both spouses pass together
- An unexpected coma
- Estate tax issues
- Probate costs and administration
However, if I meet with a client and ask them to provide me with in-depth details about their current investments, they can usually answer this question rather effectively (why they chose their advisor, what investments they own, their asset allocation, etc.).
So why is it that most financial advisors don’t work extensively to ensure their clients are as educated as they should be, and that their client’s wealth is protected as well as it should be?
I think the answer is very simple… most clients do not like to purchase, discuss, or be sold any forms of insurance. Most clients view insurance as “throwing money down the drain”. The perception and belief is usually that it will never happen to me! And because statistically speaking they might be correct, sometimes financial advisors prefer to steer away from wealth protection and focus on the “fun stuff”… growing wealth… investments.
What I’ve attempted to list below are some topics that I strongly feel must be discussed when creating a sound comprehensive plan. You should DEMAND answers to these areas when working with your planner on your retirement plan.
- Do you have short-term disability, long-term, or both?
- How long is your waiting (or elimination) period?
- What percentage of your salary does it pay for?
- How long does it pay for?
- Is there a cost of living adjustment to keep pace with inflation?
- What is the definition of disability?
- What are the tax consequences?
- Is there a maximum amount per month?
- Does this disability insurance cover your salary and commissions?
- Does it have an own occupation clause
- Is individual disability insurance a better option?
Your income is your most important asset, so you can’t afford not to protect it! Learn more by listening to my radio show segment on disability insurance, and by watching my WDBJ7 segment on disability insurance.
- How much will you be protected if you are sued from an accident that occurs in your car? In your home?
- What are the deductibles on your car? Your home insurance?
- Does your home insurance have full replacement value?
- Do you have receipts, pictures, or a video of your home contents in the event of something such as a fire?
- How should your car be titled? Individual? Joint?
It is surprisingly easy to get sued for $1-2 million if you cause an auto accident. If that were to happen, what does your car insurance cover you for? Certainly not enough to take care of $1-2 million. Don’t let your world get turned upside down financially, discover an easy solution by watching this video on lawsuit protection.
Long Term Care
- At what age should you consider purchasing it?
- Do you really need it?
- How much does it cost?
- How much should you choose for your daily benefit?
- How many years should your benefits pay for?
- Does it make sense to own a cost of living rider?
- What carriers have the strongest financial ratings?
According to the U.S. Department of Health and Human Services, 70% of people turning age 65 can expect to use some form of long-term care during their lives. With the exponentially growing cost of long-term care, I believe it is something everyone should evaluate and consider to protect against a large loss. For more information, visit my long-term care resource page where you can watch a short WDBJ7 Your Money Matters segment on long-term care and listen to my radio show segment on long-term care planning.
- Does your medical insurance carry a maximum benefit limit?
- Which types of insurance are best: HMO, PPO, HSA, FSA? What are the differences?
- What is your deductible or co-pay?
- What is your maximum out-of-pocket cost?
- What are the differences between in-network and out-of-network?
- How do you read your statement?
- At what age can you begin taking benefits? When should you?
- What is your full retirement age?
- What are the tax ramifications?
- What are the spousal benefit options?
Social security is arguably one of the most sophisticated and complicated decisions you can make in retirement. The great debate is what is the right time to take social security, but there are many other important questions you need to consider when it comes to social security.
The free articles, videos, and audios on my social security resource page will help you identify what you need to know to maximize your social security retirement benefits.
Wills and Trusts
- What is the difference between a Will and a Trust?
- Which should you have?
- If you have one, is it outdated?
- What is a Living Will? Do you have one?
- What are Durable Powers of Attorney? Do you both have them?
- What are Health Directives? Do you both need them?
- What is the difference between a Revocable or Irrevocable Trust?
- Who should be your Guardians? Who should be your Trustees?
- Is your Trust properly funded?
The harsh reality is that millions of Americans die without ever having a will. They have no estate plan at all. Their family is left in disarray and has to go through probate which is costly and time consuming. It is a family nightmare that doesn’t need to take place.
In this short WDBJ7 segment you will learn the 3 things you must have in an estate plan or will. If you want to make sure what you have goes to who you want, when you want, without leaving behind a big mess, listen to my radio show episode on estate planning.
Last but not least, read this informative article on wills and probate.
- Do you know exactly what type of life insurance you own now?
- What are the different types of life insurance, and what kind should you have?
- How much total coverage should you have? And your spouse?
Life insurance is very complicated and easily misunderstood. What type of life insurance should you own? How much coverage do you need? Should you take life insurance provided by your employer? There are many additional questions to answer and myths surrounding life insurance are plentiful.
On my life insurance resource page I’ll help you identify and answer the important questions you need to focus on when it comes to life insurance.
Protection from unexpected events that could cause financial ruin is just as important, if not more important, than growing wealth.
The harsh reality is that you can spend a lifetime doing a great job accumulating wealth, or achieving what you believe to be a superior rate of return. However, should there be an unexpected event that was not planned in advance, you can lose a lifetime of hard-earned wealth… and potentially cause a lifetime of financial pain.
If you are not fully protected in any of the areas above, reach out to me below now.
Do You Have Questions? Need Advice or Guidance?
Talk with Chris about anything and everything financial - wealth management, retirement planning, social security, annuities, bonds, Roth IRA's, asset and lawsuit protection, insurance, estate and legacy planning, college planning, end of life planning, taxes, ...
There is no cost or obligation for the first or second consultation*. All information is secure and confidential.
By Chris Hill
Chris Hill, RFC, is the President of Wealth and Income Group, a financial services and private wealth management firm, with branch offices located in Roanoke, Lynchburg, Tysons Corner, Chantilly, and Stephens City Virginia. Chris assists individuals, families, and business owners with their financial and retirement planning matters, with a primary focus on wealth management. Chris is also a widely-recognized editor, speaker, and expert on the stock market and other financial topics. Learn more about Chris here, or reach out to him at (540) 685-4321 to chat.