Risk Management
Protect the financial plan from the risks that could change it.
Risk management looks at what happens if income stops, health changes, a family member dies, long-term care is needed, or a business depends too heavily on one person.
A strong plan considers what could derail it.
Insurance is not the goal. The goal is identifying financial risks you may be unwilling or unable to absorb personally and evaluating whether transferring part of that risk may be appropriate.
What This May Include
The right strategy depends on your goals, resources, stage of life, and how this planning area fits the broader financial picture.
Life Insurance
Evaluate family obligations, business needs, debt, income replacement, estate considerations, and how much risk can be self-funded.
Disability Income
Consider the earning power supporting the rest of the financial plan and what income would continue after a qualifying disability.
Long-Term Care
Consider the potential financial impact of future care needs and the role insurance, assets, or a combination may play.
Business Risk
Review key-person, continuity, buy-sell, and other business risks that may affect owners, employees, or family.
Questions Worth Asking
These questions can help frame a broader planning conversation.
- What financial risks would be difficult for us to absorb?
- Is existing coverage still appropriate for current income and responsibilities?
- How would the plan change if I could not work?
- What risks belong on the business versus personally?
- Are we over-protected in one area and under-protected in another?
Make the Decision in Context.
If protection decisions have not been revisited as income, family, or business responsibilities have grown, a risk-management review may be useful.
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