I don’t know about you, but I hate to think about the really scary things that can happen in life. At the same time I know it’s the responsible thing to do. I love my family and I want to make sure that if something happens to me that they’ll be taken care of.
There are two sides of disaster planning. Scenario planning is something I hope you’re already doing. This post is going to ask you to do something you really don’t want to do, think about risk management and planning.
Do you have proper personal insurance?
You probably know that insurance is a really complicated topic. There are insurances that I know you have. If you own a car you have car insurance. If you have a mortgage you have homeowners insurance.
Do you have disability insurance? What about life insurance? If you can’t work or you die will your family be OK? I know you think it’s rare that this would happen. You might even be saying, “This will never happen to me.” If you believe this, think again. According to Tom Deans author of Willing Wisdom the chance of you being disabled for over 90 days is high enough that not paying attention to this can cause you real harm. You need to know how you and your family would survive if you can’t work.
Make sure your medical insurance is up to date.
We are entering a new world of medical insurance. This is a world that has become very complicated. I recommend that you find a consultant or advisor who can help you navigate the choices you have. This is especially true if your medical choices are through Medicare.
If you own a business do you still provide insurance for your people? Do you stay with a fully insured program or use a program that supports a Health Savings Account? What sort of deductibles do you have? Does the one page explanation from the insurance company tell the whole story? You might be surprised by the answers you find. One thing is for sure, the world of medical insurance is changing. You don’t want to take risks bigger than you’re comfortable with.
What about health care proxies?
Tom Dean author of Willing Wisdom also states that over 50% of the people in the US don’t have a will. You can be sure that if you don’t have a will, you won’t have a health care proxy. What do you want to have happen if you are about to be put on life support? How are the bills in your family going to be paid? Does your significant other have access to the important documents and cash in your family?
The world of health care proxies only come into play if something terrible happens. Don’t add extra stress to your loved ones. Help them carry out your wishes.
What will you do if you lose your job?
The chance of you losing your job or having to change jobs is a real and present danger. It’s very rare that someone goes to work for a company and spends an entire career with that employer. Most likely you’ll have six to ten different employers and careers during your life.
Have you thought about what type of work gives you pleasure? Are you excited to get up in the morning and go to work? If the answer isn’t yes, then its time for you take control and make some changes in your life. Even if you love what you do, there’s a chance that your company will downsize, right size, or just have to lay people off. What would you do if you become one of them?
The real question is have you put together a rainy day fund? You need to have some emergency savings around. The chance of needing it is high in today’s work environment.
What will you do if you lose your significant other?
What happens if your significant other dies? Do you have enough cash in place to hold you through? Have you bought life insurance to at least get you through a transition? Would the death of a loved one trigger a large tax bill? These are all questions you should answer as part of your plan to create safety around the big and scary things that can happen in your life.
If you don’t have a financial advisor who asks you these questions, you need to find one. There will be a cost. It might be some of the best money you ever spend, especially if any of these things happen to you. Let your financial advisor be your thinking partner and help you navigate the challenges of risk management.