Financial planning is easiest if started early, but an early start does not ensure success. A financial plan needs to be tailored for your situation and flexible enough to accommodate changing priorities.
A solid financial plan can help:
- Provide for your family in the event of untimely death, disability, or illness,
- Secure a comfortable retirement,
- Minimize taxes, and
- Leave an estate for heirs.
Your twenties and thirties are likely to be the most demanding years of your life. After the costs of a home, car, and student loan payments, it may seem that investing is impossible. Younger couples, especially those with children, tend to have fewer assets and more debts. A good place to start then is protecting what you already have with insurance. Different types of insurance can help cover your responsibilities in different ways.
Life insurance creates security for your family in the event that you die prematurely. The advantages of life insurance are:
- Not subject to income tax,
- Creation of an instant estate,
- May avoid probate costs, and
- May be protected from creditors,
Disability insurance protects your income in the event that unable to work. Disability insurance:
- Covers your ability to earn an income,
- Protects your lifestyle and financial independence,
- Helps pay fixed expenses if you are disabled, and
- Helps buy out a disabled partner’s share of a business.
Critical illness insurance helps pay additional expenses associated with a serious illness. A lump sum is paid if you are diagnosed with a serious illness. The proceeds can be used for any need; from seeking uninsured medical services abroad, to modifying a home or office for accessibility, to allowing a spouse to take time away from work to care for you and your family. Critical illness insurance is a complement to disability insurance. Critical illness insurance:
- Is a lump sum benefit to be used for any need,
- Can cover up to 24 critical illnesses,
- Can be purchased by a non-income earning spouse,
- Is a payment regardless of ability to work, and
- May have a cash surrender value.
Even if you have put off planning into your thirties or forties, it is not too late. An established career and income may leave you with enough to more easily manage your financial security plan as well as more responsibilities that require protection.
Later, as you look to retirement, assets built in earlier times are use to provide income. At this point the savings that have accrued in permanent life insurance can be converted into an income stream. Critical illness insurance becomes increasingly important to protect assets in the case of a serious illness.
Purchasing financial products that meets your needs today and will continue to meet your needs in the future can be complex. Professional advice from a knowledgeable financial security and investment representative supported by a team of experts is essential.