We all go about our merry ways, but I suggest we need to be cognizant that our income can stop, both now and in the future. I’ll share 3 life changing moments.

Death

Yes, I know, we all expect to live forever, but no, we won’t. Income loss is certainly a bigger concern for younger folks with dependents, but it can be an issue for anyone at any age. The solution…life insurance. But then the discussion of what kind? I printed out the number of different types of life insurance products…25! The type of insurance (term, universal, whole, etc.) is not as important as the amount. Term insurance is relatively inexpensive and there is no reason not to have a sufficient amount to replace the potential loss of income for a family or business. That said, remember, term insurance in like wetting the bed, you get immediate relief, but sooner or later you need to get out of it.

Disability

I have read from several sources that the possibility of being disabled before age 65 is about 5 times greater than death. Wow, could be a problem as disability is a living death…income stops, but we are still living with expenses. The solution…disability insurance. I would suggest long term (5 years or more) rather that the short term (6 months). Long term is the bigger risk. I have also discovered that if one pays premiums to age 65, the break even is around 10 months of disability benefits. We might need to ask if the risk is worth it?

Retirement

Yeah! We’ve arrived to retirement. Now what? Do I have enough assets to provide income for the rest of our lives? First of all, this should have been discussed at least 5 years earlier. Regardless, here you are, ready to stop working and stop receiving the monthly check. So, what are your assets, i.e., home equity, IRA, 401k, investment portfolio, annuities, life insurance cash values, etc.? The solution…full evaluation for income, taxes, inflation, expected rate of return and longevity.

I am quite sure, all of this is not news, but I hope it is a reminder to take action to protect one’s self, family and business should income stop.

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