Risk Management: Property, Casualty, Life, Disability, and Long Term Care Insurance

When it comes to creating a sound financial strategy, many people think of a diversified portfolio or making sure they are regularly contributing to their retirement plan. However, a good financial plan includes insuring against the unexpected and making sure that no matter what happens, your biggest financial assets are preserved.

Each type of insurance has specific coverages and restrictions, and some types of insurance make more sense than others, depending on your age. Talk with your financial advisor to ensure that insurance is a part of your strategy.

• Property insurance may take the form of homeowners insurance, renters insurance, or insurance against a specific natural disaster, like flood or earthquake insurance. Property insurance typically covers the building itself and the contents within it should something happen. A rental policy will cover your possessions as a renter should something happen to your building. ¹
• Casualty insurance protects you against claims or lawsuits made against you by outside parties. Casualty insurance is already bundled in if you already have homeowners and auto insurance. For example, if someone falls down your deck steps because you failed to maintain them, the casualty part of your homeowners insurance would cover this type of claim.²
• Life insurance is a way of providing financial support to your loved ones after you are gone. You will pay a premium and the insurer will pay a death benefit to your beneficiaries after you are gone. Those funds can be used to pay funeral expenses, mortgage payments, and day-to-day living expenses.³
• Disability insurance protects you if you become disabled and unable to work. It is helpful to think of disability insurance as insurance for your income. The two types of disability insurance—short-term disability (STD) and long-term disability (LTD)—are typically offered as part of or in addition to your insurance options provided by your employer. STD typically covers periods of injury or disability from 4-26 weeks, while LTD usually offers several years of continuous income replacement after a work-ending illness or injury. However, these policies only typically cover a percentage of your previous income.⁴
• Long term care insurance is designed to help pay for in-patient or at-home care for a chronic condition. Long term care insurance can cover nursing homes, assisted living facilities, home health aides, and private-duty nurses.⁵

Insurance is an essential part of a sound financial plan. By preparing for the worst, you will be able to handle changes in and provide a degree of protection against significant disasters or illnesses.

If you would like to review your insurance and coverage options, contact us here.