Insurance Industry tips

Proven ways toward Financial Protection.

By August 5, 2022 No Comments

Proven ways toward Financial Protection.

Here are some steps to create a more financially secure future for you and your loved ones. 

  1. Create a budget.

The first step toward getting financially fit is to create a budget. Everyone needs an understanding of how much they’re earning, how much they’re spending, and how they’re going to meet their current and future financial goals.

The Federal Trade Commission has information on how to create a budget. Once you outline your budget, make sure to stick to it. Also make sure to regularly revisit it and adjust it as needed. (Provide the link to the Federal Trade Commission)

  1. Control and minimize debt.

Your budget will help you keep track of where your money is going. It will also help you identify areas where you’re overspending. It’s critical to cut out any excess spending. Also work to minimize your debt load. So long as you have debt, you’ll be responsible for paying interest. Set goals to pay off your debt and track your progress.

  1. Automate an emergency fund.

An emergency fund is money you set aside for unforeseen expenses. They could be an unexpected home, medical expenses, car repair or a job loss. Most financial professionals recommend having three to six months of basic living expenses in an emergency fund.

However, it takes time to build those funds. Automate the process by having part of your paycheck deposited into a special emergency fund account. You can also have your bank automatically transfer funds to a savings account earmarked for emergency expenses. Even a small amount each week can help you get there.

  1. Get life and Disability insurance to protect your loved ones and review it annually.

Life insurance provides your loved ones with money to maintain their lifestyle if you die and Disability insurance provides for continuation of income should you be unable to work. This money can replace your current income, retirement income, pay off debts like a mortgage, education expenses and cover funeral costs.

Experts recommend having life insurance that equals between 10 to 15 times your gross income. For a working idea of how much you need, use an online calculator like the Life Insurance Needs Calculator. (can you provide a URL link to the calculator?) Then work with an insurance professional to explore your options and secure the most appropriate coverage. Make sure to review your life insurance annually or after a big life change like buying a new house, having a baby, or changing jobs.

  1. Protect your paycheck with Disability Insurance and review it annually.

Disability insurance is one of the best ways to protect your most important asset: your paycheck. Disability insurance typically replaces 50% to 70% of your earnings if you’re unable to work due to a disabling illness or injury. Some Disability policies will include Long Term Care coverage should you need rehabilitation in a facility away from home or in your home.

An easy way to calculate how much you might need is to use an online calculator like the Disability Insurance Needs Calculator (can you provide a link?). Make sure to review your coverage with your family members, HR department or an insurance professional as your salary increases.

  1. Keep beneficiaries up to date.

It’s important to update the beneficiaries on your financial accounts like your life insurance or 401(k). This is especially true after major life events such as a marriage, divorce, birth, starting a business or death. Not having the right beneficiary can lead to money going to the wrong person or delays in disbursing money.

  1. Put a will in place.

A will is a document that allows you to specify certain things after you die. They can include how your assets will be distributed, who will make sure your wishes are carried out, and who will take care of any minor children.

Without a will, the state could decide who gets your children and more. Fortunately, the process of creating a will is not as complicated as many people believe. And it’s well worth it since it spares your loved ones from all kinds of headaches. A lawyer can help you create a will  that is best suited and discuss other issues like power of attorney.

  1. Save for retirement.

Tap into reputable and experienced resources to help grow your retirement nest egg. That includes enrolling in your company’s 401(k) plan 403(b) plan, educational savings plans or looking into other retirement savings options like an IRA.

Definitely take advantage of any “matching funds” your company makes to your 401(k) or 403(b) contributions. Matching funds are like “free money.” What’s more, the contributions you make to your 401(k) reduce your taxable income.

About CMR | PolicySmart®

PolicySmart’s’ risk management consultants provide independent Group Benefits, Retirement and Commercial Insurance advice by reviewing your current portfolio of policies to improve coverage and reduce cost.  By using our proprietary database – The CMR Database® (comprising some 13,000 brokers and specialists globally), we maximize access to the insurance and retirement industry providing greater options that will translate to better coverage and lower cost.

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