Insurance: An Integral Part of a Sound Financial Plan

May 20, 2021


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If an advisor sat down with you to review your financial plan, what would you expect to talk about? Your 401(k) or investment portfolio? Last year’s tax return? Your FICO score? Credit card balances? The truth is that, when people think about personal finance, they often focus on investing or debt. But a sound financial plan has a variety of components, including: 


In fact, you could argue that insurance is the foundation of any personal finance plan because of the potential of an uninsured loss to destroy a lifetime of savings. A medical bill, a house fire, a flood, an automobile accident or a lawsuit can not only wipe out assets and strain budgets, but also trigger years of legal and other complications that can greatly diminish one’s quality of life.

Fortunately, the right insurance policies can mitigate many of life’s risks. However, you need to sit down with a knowledgeable insurance agent and discuss your particular situation. A carefully researched policy is better than a one-size-fits-all solution, and an agent who doesn’t know much about you probably shouldn’t sell you a policy to begin with.

Why Specifics Matter

Here are a few examples of how the details of someone’s life can impact their insurance needs from a financial planning perspective. 

High net worth. If you have a lot of assets or a high-profile position, you may have an increased litigation risk. A personal umbrella policy may provide you important additional protection.

Health risks. If this is the case, then a high-quality health insurance plan is obviously important. But you may also want to consider long-term care insurance, disability insurance and sufficient life insurance to insulate your family from the financial impact of your condition.

Valuables. Art, antiques, guns, fine wines and collectibles are some items for which typical homeowners policies can exclude or limit coverage. Talk to your insurance agent about any exclusions to your policy and additional riders your prized possessions might require should they suffer damage or theft.

High-risk occupation or hobby. If you work in a dangerous job or have a passion for skydiving, make sure you have ample disability coverage in event of an accident or injury — and sufficient life insurance to protect your loved ones.

Special occupational needs. If your business operations require specialized transportable equipment or property, you may need inland marine insurance. The need for this type of insurance is common in a number of industries, including construction, renewable energy, transportation/logistics, scientific and technical research, communication technology, medical diagnosis and fine art museums and galleries. 

Your knowledgeable We Insure agent can assemble the right mix of policies and coverage to suit your individual needs. Call your local agent for a complimentary insurance consultation. It’s fast, free and critically important to your financial future, so don’t delay.