Building Family Wealth by Insuring It


When you think about your wealth, it’s easy for the mind to leap to any number of ways you plan to pursue more of it. You earn it, save it, invest it – all so you can accumulate enough of it to fund your dreams.

What about insuring your wealth? Many people overlook the essential role insurance plays in their wealth and well-being.

For example, consider our new clients “John & Jane Sample,” a young couple in their mid-30s with a growing family. They have two children, they’re paying off their home, and they both have careers.

John and Jane have a significant amount to protect. At the very least, they would never want to become impoverished or leave their children in dire straits. Beyond that, they undoubtedly hope to help with their children’s higher education, pay off their own mortgage, maybe retire someday, and otherwise enjoy their lives.

But what if the unexpected occurs? Poof – all their hopes and hard work could vanish overnight.

That’s where insurance comes into play, to ensure that you or your loved ones can continue to afford your current lifestyle if you or your spouse become disabled, critically ill, or worse. To cover these three risks, there are three main types of insurances: life, disability and critical illness insurance. By having all three, your family’s financial plan can remain on track and protected, come what may.

As we performed an insurance needs analysis for John and Jane, we found they were underinsured given the risks they faced, so we helped them as follows:

  • Life insurance: We helped them apply for a term life insurance policy with $1.5 million in coverage should one or both of them pass away. This replaces their future income stream with an alternate source of income if needed. (For younger couples, we typically suggest term vs. permanent insurance. First, it’s usually more cost-effective. Also, once the kids are grown and gone, they may want to decrease or drop the coverage entirely.)
  • Disability insurance: We determined their group disability plans at work were already sufficiently covering them, should either become disabled. Additional coverage seemed unwarranted for now, but we intend to keep an eye on it, in case their circumstances change.
  • Critical illness insurance: We determined they were missing this puzzle piece, exposing themselves to unwarranted risk. To bridge this gap, John and Jane each applied for $100,000 policies to replace lost income and cover expenses with a lump sum payment if either or both became critically ill.

Are you and your loved ones sufficiently protected against the unexpected? Given that most families can shore up what they’ve built for pennies on the dollar (or less), why wouldn’t you want to ensure that you’ve got adequate insurance in place, always there to catch you should you fall? Let us know if we can provide you with an insurance needs analysis of your own.

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