Protect The Ones You Love - An Advice Column

Protect the Ones You Love – An Advice Column

As the 14th of February approaches and forgetful husbands such as myself scramble to make special plans for their partners, it brings me some comfort to know that the pandemic hasn’t changed everything!

In the spirit of the hardships that temper love over time, it felt as appropriate to address some of these challenges head on. Dealing with the unexpected is always difficult, but when it comes to our physical health, mobility or even life itself I have seen the boundaries of love be pushed. Believe me when I tell you that it is as uncomfortable for me as your financial advisor to bring up these topics as it is for you to discuss them. Burying our heads in the sand is not a viable option and the consequences of being unprepared are too dire.

You are the single greatest asset to your household. Not your home or your retirement account or those shares of Tesla you bought. Your ability to provide for your family not only today but for years to come is more significant than many people realize. So why do so many people carry little to no insurance to protect their loved ones in the event that they lose this ability?

Consider this – the average monthly benefit for someone commencing their social security today at full retirement age (67[i]) is $1,543[ii] and their life expectancy is 83.47[iii] years. Allowing for cost of living adjustment that expected income would be worth $360,147 in today’s money.

Insurance is never a fun topic to discuss and facing our vulnerabilities naturally makes us all uncomfortable. Unpleasant as it is, I ask that you turn to love in the face of fear to find the strength to do what is right. Remember that especially in the case of death, disability or chronic illness, the benefits of insurance are there for the ones you love.

 This month we take a page from the book of cheesy love advice columns to address different ways you can protect the ones you love. Read carefully as it just may save your relationship!

Dear Scott

My wife keeps nagging me about life insurance and last night it led to a big fight. Words were exchanged. She said if I Ioved her and the kids that I’d make sure I had life insurance. Thing is, I’m still young and don’t have any plans to leave them – can’t I just put it off until later?

Saul Wellingood

Critic

SW,

You’ve heard the phrase “Happy Wife, Happy Life” right? In the case of this tussle, I have to take her side. Although it may not have felt this way by the end of your fight, she absolutely wants you here and not lying six feet under.

There are several great free tools available online to help you uncover what’s at stake for your family if you were to pass away unexpectedly. When it comes to waiting, the price of coverage only goes up the older you are and your chances of getting coverage diminish if your health declines in that time.

It’s time to make amends with Mrs. Wellingood… consider a nice date evening with the first course coming in the form of a meeting with your insurance agent.

Dear Scott

I read your response to Mr. Wellingood. My husband and I are in a similar situation but with both of us working and every spare dollar we can find going to paying the bills and some savings how are we supposed to be able to afford a luxury like life insurance?

Barb Dwyer

Security Guard

BD,

As someone who has spent a career sifting through family budgets, I can absolutely appreciate the challenges of trying to fit it all in. Fortunately, good life insurance is like good security fencing – there is a spectrum of protection for a spectrum of budgets… and anything is better than nothing!

Term life insurance provides protection for a set time period; typically 10, 20 or 30 years. This type of life insurance will usually provide the most coverage for the least premium. It’s best to consider what you are trying to protect (like your income or your mortgage) and for how long in choosing your coverage. Fortunately, most term life policies are “level” meaning the premium stays fixed for the duration of your coverage, so unlike most of your other bills it will shrink as a percentage of your overall monthly expenses as your income rises and other bills increase.

I would recommend contacting your life insurance agent today to discuss your needs. You may be surprised just how much you are able to get within your budget. Besides, if you thought your budget was tight as things stand now, imagine how tight it would be if you or your spouse’s income were lost permanently due to an unexpected death.

Dear Scott

Playing tackle football with my grandson the other day, I realized I’m not in the shape I used to be when I woke up the next day hardly able to move.  Fortunately, I got the feeling back in my feet after a few hours’ rest, but it got me thinking about what might have happened if I’d been laid up for a long time. I’m still years from retirement and the family depends on me.

Bruno Moore

Former Barista

 BM,

They say that aging ain’t for the faint-hearted and I am sure you are like most people in that your body wakes up feeling a little different than it did in years past. It might surprise you to learn that a shocking number of “early retirements” occur when our bodies tell us we can no longer work. Sometimes it’s just a tweak that gets resolved in a couple hours but other times it can be something that is lingering or life altering. Your concerns are valid.

The world doesn’t need another screaming duck on a commercial to tell you that disability insurance exists to help cover your expenses if you’re out of work. Keep in mind that there are various types with various rules around when and how much they pay out. Short term disability insurance usually only lasts for up to two years whereas long term may not kick in until then. Depending on your insurance plan, your policy could cease paying once you are able to return to your same job or as soon as you are able to return to any type of work (even if the work pays substantially less). Most policies have some sort of waiting period as well, called an “exclusion period”, before the policy starts paying you so be sure to keep a cushion in savings to bridge the gap.

You may have coverage available through your employer or many professional associations have options available as well. It never hurts to see if you might even have something included in part of your life insurance policies. It’s best to review your options with your financial advisor and consider supplemental coverage where necessary. It may not bring the feeling back to your feet any sooner but having the right insurance protections in place can protect a physical injury from becoming a financial and emotional one.

Protecting the ones you love is a complex subject and can be uncomfortable to discuss. However, it’s an important part of a comprehensive financial plan and we recommend discussing it regularly with your CFP® professional.

 [i] Full Retirement Age (FRA) is 67 for those born in 1960 or later

[ii] AARP   How much Social Security will I get?

[iii] Social Security Administration 2017 table