Managing Risk


Insurance Strategies

Insurance strategies help safeguard your wealth in case of an unforeseen death, disability, or long-term care need.  Strategies can also be used in creative ways to help achieve your retirement and estate planning goals.

Life Insurance for Retirement and Estate Planning

Life insurance is an important financial tool used to protect one’s interests after death.  Strategies can be developed to:

  • Maintain your spouse’s retirement plan.  The death of a spouse as retirement approaches, likely during peak earning years, can derail an otherwise solid financial plan for the surviving spouse.  Life insurance can be used to address the shortfall caused by lost earnings and retirement benefits.
  • Provide cash for estate taxes.  Estate taxes need to be funded regardless of the liquidity and taxability of your assets.  Life insurance provides an immediate inflow of cash so heirs are not faced with selling real estate or investments in adverse markets. Cash from insurance may also reduce your heirs’ income tax liabilities.
  • Maintain and grow a business.  Business owners rely on life insurance to reduce risk and acquire additional funding.  Common uses include key man insurance, life insurance as loan collateral, and buy-sell agreement funding.

Replace Earnings with Disability Insurance

Disability is unpredictable – we don’t know if it will happen, when it will happen, how long it will last, or its severity.  If you are still working, short-term and long-term disability insurance strategies include:

  • Maximize employee benefits.  You may be eligible for group disability benefits at relatively low cost.
  • Supplement with private insurance.  If you are self-employed or group insurance is unavailable or insufficient, private insurance can be purchased to meet your needs.
  • Don’t touch retirement savings.  Disability income replacement reduces the risk of tapping your nest egg before retirement.  Proper emergency fund planning should also be in place for short-term emergencies.

Preserve Assets with Long-Term Care Insurance

The primary goal for long-term care insurance is to preserve assets.  Long-term care, like disability, is impossible to predict in terms of when it will happen, how long it will last, and the level of care that may be needed.  Coverage is expensive so it is best suited for those with higher income and asset levels.  Insurance strategies include:

  • Preserve assets for your spouse.  High costs of care can deplete savings rapidly, leaving a healthy spouse with inadequate resources for his or her retirement.
  • Cover different types of care.  Policies can cover home care, assisted living, and nursing home care.  A strategy that is too specific may not payout when you need it.
  • Guard against inflation.  Long-term care costs are on track to continue rising faster than the rate of inflation.  An inflation rider ensures your policy will cover more of the costs of care down the road.

Complete a Risk Management Review

Contact our office for a risk management review or needs analysis for life, disability and long-term care. Our strategies are available through independent licensed professionals, enabling us to navigate the world of insurance providers and products on your behalf.

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Wechter Feldman