financial risks in your life

How to Manage Financial Risks in Your Life

How To Manage Financial Risks In Your Life

Every now and then we should evaluate and try to resolve any financial risks that could affect the overall financial planning in our life. Probably the three most important financial risks we should consider are:

  • The Death of the Main Breadwinner
  • Outliving Assets At Retirement
  • The Cost of A Serious Illness

Death of the Main Breadwinner

A subject no one wants to think about is DEATH.  This is a serious issue. In particular for young parents with children. It takes a long time to accumulate enough assets so that if the main breadwinner suddenly dies, there are sufficient assets for the surviving parent to be able to pay for expenses such as the mortgage, food, education expenses of the children, medical expenses, etc. Life insurance is unique for its ability to provide cash at the time it might be needed most when income is interrupted due to the death of the main breadwinner.   Term Life Insurance, in particular is an affordable way to provide your family with death benefit protection. It provides coverage for a period of time that is finite, for instance 10, 15, 20, and even 30 years of financial security. Term Life Insurance policies provide a stated benefit upon the death of the insured, as long as the death happens within the coverage period.


Outliving Assets At Retirement

Another risk that the current generation of retirees is facing is OUTLIVING THEIR ASSETS. In other words, will you have enough assets to support your standard of living for the rest of your life after you stopped working and no longer earn an income? Any cash value that a life insurance policy builds can be used to supplement income at retirement.

One factor that will have an influence on your retirement funds is TAXES. Tax rate changes can result in volatility of the after-tax income you have available during your retirement years. Will tax rates go up? Down? Stay the same? How you answer that question may impact how you choose to center your retirement plan. 

If you believe tax rates are going to increase in the future, and you currently hold most of your retirement portfolio in tax-deferred accounts (such as 401k’s) you may want to consider reshaping your retirement portfolio to include investments that are taxed differently at tax time – when you retire.

The primary purpose of life insurance is death benefit protection, so you may have traditionally viewed life insurance as just a necessary expense. However, cash value life insurance, when purchased in conjunction with you other retirement investments, may provide an ideal way to tax-diversify your retirement savings.



The Cost of A Serious Illness

While people are living longer, they are not necessarily living healthier. An ACCELERATED DEATH BENEFIT rider in a life insurance policy can provide cash for serious illnesses without liquidating assets. It allows  the policy owner to receive a portion of the death benefit if the insured has been diagnosed with a qualifying illness.

Most people buy life insurance to leave a legacy for those left behind, but what if you suffer from a heart attack, cancer, or stroke and continue living? It could cause serious financial hardship for you or your family. A life insurance policy, in addition to death benefit protection, can provide early access to the policy’s cash value benefit in the event of a qualifying chronic, critical or terminal illness, while you are alive.



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Florida-Licensed Life, Health and Variable Annuity Agent

(888) 950 – 8376




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