Financial Planning

Proper Income Protection

Proper income protection (along with a robust emergency fund) is extremely important to an individual or family’s financial well-being

Proper income protection (along with a robust emergency fund) is extremely important for an individual or family’s financial well-being. There are several types of proper income protection which include proper health insurance (against medical expenses for an illness or injury), disability insurance (against wage loss from a long-term illness or injury), life insurance (against the loss of wages from a passing), and property and casualty insurance (also known as car, home, renter’s, and umbrella insurance against property damage and injury). If your financial plan is lacking any of these elements, it can bring about huge bills or the inability to pay your current obligations.

Health Insurance

Health insurance is one of the most important forms of protection (and is often provided through your employer). Although it has become much more expensive over the years, huge medical bills can be crippling to your financial future (even for generally healthy individuals). A “simple” broken leg from an accident, or an unexpected stay in the hospital can cost tens of thousands of dollars without insurance which can end up effecting your financial stability for years to come.  Also, it is important to reduce the chance of a lapse if you have any prior conditions.

Life Insurance

Life insurance is an important part of your financial future, however this item is often overlooked.  Remember, it is almost always much less expensive to obtain coverage when you are younger and healthier, than it is when you are older. Many people who are not married and have no dependents refuse to discuss life insurance coverage, claiming that they have nothing to worry about. However, if you have any outstanding debt or plan to start a family in the future, adequate coverage should be thought about now. Proceeds from life insurance can allow debt to be paid off, can be invested to reduce the loss of income, and can provide for the future of your family.

Disability Insurance

Disability insurance, while often provided by your employer, is very important to discuss with a financial advisor as the proceeds could be taxable. Disability insurance will help replace a pre-determined portion of your income for a certain period of time if you suffer from a long-term illness or injury. This can also provide for your family and assist against financial despair.

Property & Casualty Insurance

Property and casualty insurance covers your home, car, belongings, and liability insurance in the event someone becomes injured on your property. Minimal car insurance is required in most states, although higher limits are often suggested, and mortgage companies often require home insurance. Any accident or issues without proper coverage can leave your family responsible for covering all of the costs of rebuilding, an event that could easily derail your financial future.


Proper income protection is extremely important for a family’s financial well-being. Income protection should include sufficient life, disability, health, and property and casualty insurance. Inefficiencies or inadequacies in coverage could cause years of financial devastation for a family.

Obtaining suggestions from friends and family members is great, but meeting with a trustworthy and knowledgeable financial advisor will provide the most up to date and beneficial coverage for your specific situation. It is important to review this plan during any life changing events, but definitely at least once a year. Any changes can bring about a need for an updated (increased or decreased) level of coverage. Most advisors can work with any budget to provide at least some coverage.

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