When you need to get an X-ray for a broken bone or you need to fix damage from a car accident, you should be able to count on your insurance to cover the costs. But insurance planning plays a huge role in managing your overall wealth as well.
Read on to learn about insurance planning and why it is essential to proper wealth management.
What is insurance planning?
Insurance planning means choosing the best policies that will protect you and your family as well as your assets during times of crisis. Insurance is a contract between you and your provider where they agree to compensate you for your losses due to unforeseen events.
There is a long list of insurance types that you can consider while insurance planning, including:
- Health insurance.
- Disability insurance.
- Life insurance.
- Auto insurance.
- Homeowners insurance.
- Long-term care insurance.
Each type should be explored during your insurance planning, but health, life, auto and homeowners insurance are the most common. For instance, more than 300 million Americans had some form of health insurance in 2021. And life insurance is also highly utilized in America, with more than 170 million people in the U.S. having a policy.
Insurance planning may seem intimidating with so many avenues to explore, but a CERTIFIED FINANCIAL PLANNER™ professional can help you every step of the way.
4 reasons insurance planning is crucial in wealth management
Getting coverage for emergencies is not the only reason to get insurance policies. Insurance planning is beneficial for your wealth management. It can help your family secure a more financially stable future.
Here are four ways that insurance planning helps your overall wealth management:
- Tailored to your lifestyle — Everyone has different circumstances, which is why everyone needs personalized insurance policies. By tailoring your policies to fit your lifestyle, you can be sure that you are getting as much coverage as possible on facets of your life that need extra attention — and not spending money on the parts that do not.
- Provides possible tax benefits — Taxes are stressful for everyone, but they can be managed by taking advantage of every possible benefit. Permanent insurance policies are not typically appropriate for everyone, but there are some tax advantages you can utilize if you have one of these policies. Strategically planned life insurance will also help your beneficiaries, as the death benefit is not subject to income tax.
- Contributes security and predictability — Life can throw situations at us that we just never expect. And while that can be scary, insurance planning brings a bit of security and predictability into your overall wealth management. Not only do policies add a safety net to help secure your family and their assets, but they can also work as dependable assets that do not change often.
- May reduce risk — Taking risks can be exhilarating in many aspects of your life, but most want to minimize risk with their wealth management. When there are drastic life changes, including the death of the policyholder, insurance can help to fill the financial gap, especially with life insurance. It helps to mitigate the risk of instability and debt that can stem from unexpected situations.
Talk to a ProVise CFP® professional about insurance planning in wealth management
Now that you know how insurance planning can improve your wealth management, it is time to consult the experts to determine the best policies for your financial goals.
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about insurance planning in wealth management? Contact ProVise today to schedule a complimentary consultation.
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