Security Is in the Planning: Complete Financial Plans Include Life Insurance
Pennsylvania CPA Journal › Vol. 75 Nbr. 2, July 2004
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Summary
A sound financial plan should incorporate an evaluation of the insurance needs of each client - including life, disability, personal liability, professional liability if applicable, and long-term care among others. The basic premise for obtaining insurance is to shift a risk. When a financial plan is well thought out and properly structured, risk can be shifted or mitigated through the creative use of insurance products. This may be a preferable alternative to simply accumulating a significant amount of assets and allowing for a residual to accomplish financial, benevolent, and fiscal goals. Planners must learn how to effectively read and understand insurance contracts to be able to provide effective input as to the appropriateness of any type of product and amount of insurance. This article is devoted to reading, understanding, and interpreting various life insurance contracts. But first, it is important to address the basics.
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Security Is in the Planning: Complete Financial Plans Include Life Insurance
Product type, premium level, and underlying investment type are all components that need to be considered when picking the right product. The key factor remains, however, the matching of client needs and objectives to the qualities inherent in the product.
The planner then will have to periodically evaluate risk and ascertain the most advantageous hedge through sound but creative evaluation of circumstances and needs. The planner also needs to anticipate the need to expand and contract the amount or adjust the type of insur...See the full content of this document
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