Rainy day savings? Check.
Diversified portfolio? Check.
Car/Home/Health/Life insurance? Check.
Refinanced mortgage? Check.
College savings plan for the kiddos? Check.
After all, isn’t good financial preparation and planning, at its heart, really about mitigating risk to your future ability to live life well?
You save up an emergency fund in case you unexpectedly lose a stream of income. You save for retirement so that you don’t run out of money in your golden years. You own car and home and health insurance so that if something crazy happens in your life, there’s a plan for it that ensures that unforeseen event won’t throw your finances into abrupt turmoil. You own life insurance so that if something happens to you, your family’s financial future will be safeguarded. It’s all about planning and mitigating the financial risk of future events.
But there’s an all-too-common life curveball that isn’t(adequately) covered by any of the well-known financial solutions in the list above. Think about your financial picture and ask yourself the following question:
What is your financial plan if you survive a serious illness or injury?
“That’s what the health insurance is for!”, you say.
Well… yes and no.
Consider this: the latest stats show that 50% of all personal bankruptcies in the United States each year are medical bankruptcies –that is to say, bankruptcies which resulted primarily from the inability to pay medical bills following a unexpected serious illness or injury.
Here’s the kicker – 68% of those that filed for medical bankruptcy were covered with health insurance. It wasn’t enough to save them from going broke. It’s clear that more protection is needed than a health insurance plan can provide.
That said, there’s a crucial financial tool that even the savviest of the finance-savvy don’t know enough about: Living Benefits life insurance.
Living Benefits is a modern upgrade to traditional life insurance policies that are only there to pay out to your family if you die. While it’s still important to be protected in the event you pass away unexpectedly, you also need to make sure you have access to cash if you don’t die – like if you suffer a cancer diagnosis, heart attack, stroke, get paralyzed, or something like that. In those cases, a modern Living Benefits-enhanced policy goes to work for you by letting you accelerate your life insurance policy’s benefit while you’re still alive.
The money (which, depending on your level of coverage, could amount to hundreds of thousands of tax-free dollars) can be used to replace your income while you’re out of work (a problem health insurance fails to address altogether), give you the money you need to pursue the best care money can buy, and take financial worries off your mind in that crucial time in your life. This way, you can get back on your feet, back to work, and back to the plan as quickly as possible.
The big problem with Living Benefits? They’re still relatively new, so most Americans (and even some financial professionals)simply don’t know they exist yet. So if you’re wondering why your financial advisor or insurance lady hasn’t brought them up, now you know.
Owning these free features as part of your life insurance coverage is an absolute no-brainer. A Living Benefits policy can be had for the same price as a traditional policy that will only pay out when you’re dead. Having the option to access that money while you’re still alive and need it is absolutely critical in today’s America.
So while you’re admiring your pretty little line of ducks, make sure a lack of modern protection on your life insurance isn’t leaving a gaping hole in the financial plan you’ve worked so hard to build. It might be the biggest financial decision you haven’t made yet.