The Crucial Role of Insurance in Financial Planning
Insurance is an indispensable component of any sound financial plan, providing a crucial safety net that safeguards against unforeseen events and ensures financial security for you and your family. As your life evolves, so should your insurance coverage, adapting to your changing needs and goals. This article delves into why proper insurance coverage – including life, disability, property and casualty (P&C), and long-term care (LTC) – is essential for a robust and complete financial plan.
Life Insurance
Life insurance is crucial for safeguarding your spouse and children from financial difficulties in the event of your untimely death. It provides financial security by covering debts, living expenses, and medical or final costs. Upon your death, your beneficiaries receive a tax-free payout, ensuring they have immediate financial support. This helps them maintain their standard of living and manage essential expenses during a difficult time.
Buying life insurance is a crucial step toward securing your future. With our guidance, you can set clear goals, determine the right amount of coverage, and choose the policy that best fits your needs and budget. Life insurance offers guaranteed protection for your loved ones, income replacement, tax-free benefits, cash value growth, and even potential dividends. Plus, with optional riders, you can customize your coverage to fit your unique situation. These benefits not only provide peace of mind but also ensure your family’s long-term stability.
Disability Insurance
Disability insurance is designed to provide income protection if a policyholder cannot work due to a disability. In the U.S., this insurance is available through government programs like Social Security or private insurers. The cost of disability insurance varies based on several factors, including the strictness of qualifying requirements, the amount of income to be replaced, the duration of benefit payments, the applicant’s medical history, and the waiting period before benefits begin.
Government-sponsored disability insurance requires applicants to prove that their disability prevents them from any meaningful work and is expected to last at least 12 months or result in death. Private plans may have less stringent requirements, often covering the inability to continue in the same job. Premiums for disability insurance are higher for plans with more favorable terms for the policyholder.
Typically, disability insurance costs about 2% of the insured’s annual salary. The choice of plan depends on individual circumstances and preferences, with higher-income individuals often opting for more comprehensive plans, while those with lower incomes may choose less costly plans with stricter definitions.
Property and Casualty (P&C) Insurance
Property and casualty (P&C) insurance, also known as general insurance, covers damage to property or businesses. This category includes auto, home, commercial, and marine insurance types. P&C insurance is vital for protecting your tangible assets and mitigating risks associated with accidents, natural disasters, and other unexpected events.
The primary risk in P&C insurance is underwriting risk, which is managed through reinsurance. Reinsurance helps insurance companies spread their risk by transferring portions of their liabilities to other insurers. P&C insurance policies typically span a few years, contrasting with life insurance policies that can last decades. Proper P&C insurance coverage ensures that you are financially protected against property damage and business disruptions, providing a stable foundation for your financial plan.
Long-Term Care Insurance
Long-term care (LTC) insurance covers services such as home assistance, adult day care, and care in nursing facilities, which are essential as individuals age. With nearly half of Americans over 65 needing paid care, LTC insurance becomes crucial for long-term financial planning.
Traditional LTC policies function similarly to auto or home insurance, requiring ongoing premiums and providing benefits when needed. However, premiums can increase over time, and stopping payments results in the loss of coverage. Hybrid LTC policies combine LTC with life insurance or annuities and offer a guaranteed benefit but are more expensive. These policies involve a one-time payment or several annual payments, avoiding the risk of rising premiums.
Eligibility for LTC benefits typically requires an inability to perform daily activities or cognitive impairment. Traditional LTC policies often have stricter health requirements, while hybrid policies are more lenient. It’s advisable to consider purchasing LTC insurance in your 50s or 60s to manage costs and eligibility. Creating a long-term care plan and understanding the financial implications is essential for ensuring adequate coverage in your later years.
The Role of Financial Professionals
Navigating the complexities of insurance can be challenging, but we are here to streamline the process for you. Our team will collaborate with you to craft a tailored insurance portfolio that aligns with your unique needs, estate plans, and overall financial plan. Plus, we’ll regularly review your coverage to ensure it stays aligned with your evolving financial priorities and long-term goals.
Protecting Your Future
Insurance is more than just a safety net for worst-case scenarios; it adds predictability and security to your financial plan, ensuring consistent financial support when needed. Properly structured insurance portfolios are tailored to individual needs, considering estate plans, legacies, and personal wishes. Whether it’s life, disability, auto, home, or long-term care, insurance plays a vital role in a financial plan by protecting you and your loved ones from any of life’s unexpected twists and turns.
If you have any questions or want to learn more about why insurance policies are a vital part of your financial plan, feel free to give us a call. For more information, you can also check out Chapter 3 of ‘Wealth on Purpose’ by Bryan Ballentine.
Sources: Located at the bottom of the article
Golf Tip of the Week
Rules of Golf Review: My ball plugged in the sand. Can I take an unplayable and drop outside the bunker?
They say bunkers are intended to be a half-stroke penalty to your score. Sometimes you get lucky and save par; sometimes you don’t. That said, not all bunker lies are the half-stroke variety. You might hit a high wedge into a green that plops down into the sand like it landed in Jello-O pudding.
A fried-egg or nearly completely buried lie might give you pause as to what to do next, especially if you have a high lip in front of you. Can you get under the ball enough with your sand wedge to loft it out of the bunker? It’s a dilemma that might leaving you wondering about your options.
One question you might be asking is “Can I take an unplayable lie, add a penalty stroke to your score, and drop outside a bunker?” We’ll get to that in a second. Before we do, it’s important to point out that a plugged lie in the sand is different than a plugged lie in the grass face or layered sod wall that frames a bunker.
Under Rule 12, if your ball plugs inside the edge of a bunker (and that inside edge includes patches of ground whether it’s sand or not), you don’t get free relief the way you would if your ball plugged in a grass face. That’s a helpful thing to remember when you skull a bunker shot into the grass lip in front of you. If it plugs like this outside the bunker, you are entitled to free relief for an embedded ball (Rule 16.3). Drop within one club-length right behind where the ball got stuck so long as it’s in the general area and not nearer the hole.
Now back to the unplayable lie question: The scenario is that you hit a shot into a bunker and it either came in hot or the sand is really soft and it plugged. You might be able to get it out, but the smarter play in some cases is to take an unplayable-lie penalty and proceed under Rule 19.3.
This is where you get a little wiggle room. If you take a one-stroke penalty, you must drop in the bunker on either back-on-the-line relief or lateral relief. The simplest thing is to find a good spot within a two club-lengths relief area, no closer to the hole, and drop. This option comes with a one-shot penalty. You also can go back and replay from the previous shot (stroke-and-distance penalty) but that’s probably going to sting more.
However, if you’re willing to take a two-stroke penalty, you can take back-on-the-line relief outside the bunker. If you’re not sure what back-on-the-line relief is, it’s outlined in Rule 19.2b:
“The player may drop the original ball or another ball behind the spot of the original ball, keeping the spot of the original ball between the hole and the spot where the ball is dropped (with no limit as to how far back the ball may be dropped). The spot on the line where the ball first touches the ground when dropped creates a relief area that is one club-length in any direction from that point.”
Obviously, the spot can’t be closer to the hole, but this option might make more sense than trying to get out of an impossible bunker like this one on the Straits Course at Whistling Straits in Wisconsin.
Tip adapted from golfdigest.comi
Recipe of the Week
20-Minute Instant Pot Shrimp Scampi Pasta
Ingredients
6 tablespoons unsalted butter
2 tablespoons olive oil
6 cloves garlic, chopped
3/4 cup dry white wine
Juice and zest of 1 lemon
1/4 teaspoon crushed red pepper flakes
Kosher salt and freshly ground black pepper
6 scallions, sliced
12 ounces thin spaghetti, broken in half
1 1/2 pounds frozen peeled and deveined shrimp
Garlic bread, for serving, optional
Green salad, for serving, optional
Directions:
- Add the butter, olive oil and garlic to a 6- or 8-quart Instant Pot® multi-cooker and set to high saute (see Cook’s Note). Cook, stirring often, until the garlic is softened but not browned, about 3 minutes. Add the wine, lemon juice and zest, red pepper flakes, 2 teaspoons salt and several grinds of pepper. Bring to a boil and let simmer 1 minute. Add 2 cups water, then add half of the pasta all in one direction and then the other half of the pasta in a criss-cross fashion. Top with the shrimp and half of the scallions.
- Follow the manufacturer’s guide for locking the lid and preparing to cook. Set to pressure cook on high for 1 minute. After the pressure-cook cycle is complete, follow the manufacturer’s guide for natural release. After 5 minutes, being careful of any remaining steam, unlock and remove the lid.
- Using tongs, toss the pasta to evenly coat with the sauce and break up any clumps. Top with the remaining scallions and serve with salad and garlic bread if using.
Cook’s Note
Settings may vary on your Instant Pot® depending on the model. Please refer to the manufacturer’s guide.
Recipe adapted from foodnetwork.comii
Travel Tip of the Week
This Mom’s Viral Packing Hack for Traveling With Kids Will Save You so Much Time
Packing for a vacation can often feel like an enormous feat. Throw in a few kids, and things are bound to get even more overwhelming. But take it from TikToker and mom Jordan Martin — packing your kids’ belongings for a trip is easier than you think.
In early June, Martin took to her TikTok page to share her unique packing hack for road tripping with her children.
“This is what I’m packing all my kids’ stuff in,” she says, pulling out a plastic, four-drawer dresser. “If you think this is meant to be aesthetically pleasing and that everything is going to be folded nice and neat, for the most part, maybe, but for a lot of it, no.”
Martin then proceeds to toss her kids’ things — T-shirts, shorts, underwear, and all — into the drawers. “We can organize when we get there,” she adds.
After packing up her drawers, Martin shows off some clear packing bags she uses for toiletries and emergency supplies like bandaids and medications, which is also a fantastic way of ensuring you can easily find what you’re looking for while on the go. She then puts that bag into a larger tote, which is filled with other essentials like towels, diapers, sunscreen, and a few beach toys for good measure, too.
The video then cuts to Martin in her car showing off one more mom hack: driving at night.
“I would much rather drive at night,” she says, noting it’s better to be on the go when her smallest child is asleep. “I think all three of the kids are asleep back there,” she adds. “Prayers for the safe travels and our sanity.”
The quick clip has amassed more than 600,000 views to date, along with nearly 800 comments, most of which are in support of her quick-thinking packing advice.
“This is the hack I needed in my life,” one commenter wrote. “This is literally the smartest idea of all time,” another added. One commenter even offered advice on how to upgrade it: “If this is going to be a regular thing … remove the wheels and handle from a suitcase and add it to the dresser.”
Tip adapted from travelandleisure.com iii
Copyright © 2021. Ballentine Capital Advisors. All rights reserved.
Our mailing address is:
Ballentine Capital Advisors
15 Halton Green Way
Greenville, SC 29607
Sources:
Why is insurance important in financial planning?
Why is life insurance important?
What Is Disability Insurance? Definition and How It Protects You
Understanding Long-Term Care Insurance
Disclosure:
Ballentine Capital Advisors is a registered investment adviser. The advisory services of Ballentine Capital Advisors are not made available in any jurisdiction in which Ballentine Capital Advisors is not registered or is otherwise exempt from registration.
Please review Ballentine Capital Advisors Disclosure Brochure for a complete explanation of fees. Investing involves risks. Investments are not guaranteed and may lose value.
This material is prepared by Ballentine Capital Advisors for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation or any particular security, strategy, or investment product.
No representation is being made that any account will or is likely to achieve future profits or losses similar to those shown. You should not assume that investment decisions we make in the future will be profitable or equal the investment performance of the past. Past performance does not indicate future results.
Advisory services through Ballentine Capital Advisors, Inc.
iiihttps://www.travelandleisure.com/mom-shares-packing-hack-traveling-with-kids-viral-tiktok-8668456
