Protection
Planning – What IF?
by: Janet L. Hall
What if
something should happen to you, a family member, or one of your costly
possessions? Are they protected?
Just
like your computer should have protection against * viruses *, your
assets, family, and self also need to be protected.
First,
let’s look at some assets that might need protection:
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HOME
If you are buying a home, you are usually required to have
homeowners insurance, and depending on what area of the country
you live in, you might need additional insurance protection,
such as for natural disasters: hurricanes, tornadoes,
earthquakes, flooding, and just regular old storms!
If you are renting a home, apartment, townhouse, or condo, it is
also a good idea to look into renters insurance to protect your
belongings.
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AUTO
If you have an auto, you are probably required by law, depending
on where you live, to have auto insurance. If the car is still
being paid for (you have a loan against the car) you have to
have full coverage, which is more costly.
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EQUIPMENT
If you’re a business owner, you’ll need to protect all your
company assets, and if you rely on your computer to make a
living, get some protection for it ASAP!
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You can
get protection * in case of death * that will pay off your home, auto,
and some other bills.
You can
get protection * in case of disability * that will help you pay your
bills while disabled.
Today,
make a list of all the assets in your life that are protected, and
review the coverage you already have to make sure it meets your needs.
Make a
list of all the assets in your life that AREN’T protected, and find out
what kind of protection is available, the cost, and if there is a real
need to protect them.
And
don’t forget if you use your hands, such as a pianist, or your voice;
such as a singer to make a living, these too are assets that need to be
protected!
Second,
let’s take a look at some of the protection you and your family might
need, such as life insurance.
NOTE:
I’m going to skip over Health Insurance because I wrote about that in
another article, see
Puzzled by Your Insurance Coverage? Let’s OverHall the Pieces! If
you’re new to OverHall IT! or have forgotten about this, I urge you to
read and review this article.
Life
Insurance can provide you and your family with financial security as
protection or as an investment.
The
purpose of life insurance is to fill the gap between Social Security,
Investment Income, and any other sources of income your family might
receive, and THEIR needs after you leave this World.
So, how
much insurance will you need to replace your income, and to take care of
your families needs?
If
you’ve been doing the OverHall IT! exercises for the past six months,
you’ve got a head start on evaluating these needs.
According to
www.life-line.org , “While there’s no substitute for evaluating
needs, one rule of thumb is to buy life insurance equivalent to five to
seven times your annual gross income.”
Life-line.org
has a needs calculator that can help you with your evaluation, but
basically you need to gather up your financial information and sit down
and play the * what if * game.
NOTE: I
realize that this subject matter might be too hard for many of you to
think about, talk about, or even plan for, BUT it is a VITAL part of
OverHalling and bringing Balance to the financial area of your life.
True, many of us think * that will never happen to me *, or think you’ll
stay healthy and young forever; sadly, this is not the case for ANY of
us. Everyone must leave this World at some time, we just hope it’s
later then sooner. With that said, let’s continue.
First
look at what kind of anticipated illness expenses and funeral expenses
your loved ones will need to make IMMEDIATELY. What is the cost today?
Ten years from now? At the age of 75 or 85? Total that.
Remember, you are playing the * what if * game and you need to cover all
bases, so to speak.
Next,
add to that your total monthly family budget; this should be slightly
less now that you are gone. Do this as above: budget today, ten years,
different ages, different scenarios.
Next
write down any income your family might receive from any of the
following:
-
Your
assets (savings, stocks, real estate investments, etc)
-
Social Security Benefits
-
Survivors Benefits from your pension plan
-
Your
spouse’s salary and/or pension
-
Other sources
Total
these items and you have total income available without life insurance.
Now you
need to subtract the total income your family receives from income
required (your monthly budget expenses).
Write
down the number of years income is required (spouse’s life expectancy).
Next
multiply your required income by 12 and by the number of years for your
spouse’s life expectancy.
Subtract
the amount of insurance you already have. Add in the last illness and
funeral expenses.
Your
total will be an approximate of how much life insurance should be
maintained.
Please
remember, as your lifestyle changes, your insurance needs might change.
This is
a lot of work, I know, but isn’t your family worth it?
Now what
if you don’t have a family, children, or anyone that relies on your
income? Then you probably don’t need life insurance, unless you want to
be a nice relative or friend and leave some money to others in your life
<g>.
Do you need to buy life
insurance for your children? I say no, unless your child is a movie
star or bringing in income that the family relies on. However, you can
get life insurance for children that you would use as an investment for
future expenses, such as a college.
Do your
homework first, and then you’re ready to go and have a serious talk with
your insurance representative.
All this
insurance, protection, and coverage can become very costly, being
prepared and KNOWING what you WANT and NEED will aid you in making the
correct decisions.
Remember, this is YOUR life, and your families, please take care of
both, now, before a * what if * really happens to you.
TIP:
Don’t forget to look at the need you might have for Long Term Insurance.
NOTE:
Sometimes, and some people look at Asset Protection Planning as a way to
avoid future lawsuits, financial privacy, reduce liability insurance
costs, and a way to save on income and estate taxes. To find out more
about asset protection strategies, go to
http://www.rpifs.com/lawsuits/apbeneft.htm
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Janet, The Person/Place Energy Mover,
can help you regain control of your life, your time, your
stuff, and your environment. FREE newsletter, OverHall IT! at
http://www.overhall.com/newsletter.htm
Copyright (c) 2000-2008 OverHall Consulting
P.O. Box 263, Port Republic, MD 20676
All Rights Reserved. Permission is granted to reproduce, copy, or
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