Allard LTD. CPA & Financial Services

(952) 895-0895

Insurance Read Time: 3 min

The Value of Insuring Against Life’s Risks

Did you know that...

  1. Fifty-seven percent of American workers have no private short-term disability insurance.1,2
  2. Sixty-five percent of working people in the U.S. lack private long-term disability coverage.1,2
  3. Forty-eight percent of Americans have no life insurance.3,4
  4. Approximately 14 percent of American drivers are uninsured.5

If you ask a homeowner, replacing a roof is probably the least satisfying expense they will ever face. While the value of such an investment is obvious, it doesn't quite provide the satisfaction of new landscaping. Yet, when a heavy rain comes, ask that same owner if they would have preferred nice flowers or a sturdy roof.

Insurance is a lot like that roof. It's not a terribly gratifying expenditure, but it may offer protection against the myriad of potential financial storms that can touch down in your life.

The uncertainties of life are wide-ranging, and many of them can threaten the financial security of you and your family. We understand most of these risks – a home destroyed by a fire and a car accident are just two common risks that could subject you to an outsized financial loss.

Similarly, your inability to earn a living to support yourself and your family due to death or disability can wreak long-term financial havoc on those closest to you.

Insurance exists to help protect you from these forms of wealth destruction.

Some insurance (such as home or car) may be required. When it isn't mandated (in the case of life or disability), individuals may be tempted to avoid the certain financial "loss" associated with insurance premiums, assuming the risk of much larger losses that are less likely to happen.

But insurance premiums aren't a financial "loss." They are designed to help protect you and your family as you build personal wealth.

1. BLS.gov, 2023
2. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Federal and state laws and regulations are subject to change, which would have an impact on after-tax investment returns. Please consult legal or tax professionals for specific information regarding your individual situation.
3. III.org, 2023
4. Several factors will affect the cost and availability of life insurance, including age, health and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
5. AutoInsurance.org, June 22, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

Life and Death of a Twenty Dollar Bill

Life and Death of a Twenty Dollar Bill

How long does a $20 bill last?

What Is a 1035 Exchange?

What Is a 1035 Exchange?

1035 exchanges provide a way to trade-in an annuity contract or life insurance policy without triggering a tax liability.

Retirement Plan Choices for Small Businesses

Retirement Plan Choices for Small Businesses

Retirement choices can be intimidating. Picking the right strategy.

 

Have A Question About This Topic?







Thank you! Oops!

Financial Aid for Students 101

Help your college-bound child explore scholarships, grants, and more with this article on paying for higher education.

Fixed or Variable Mortgage, Which Should You Pick?

When selecting a mortgage, one of the most critical choices is between a fixed or variable interest-rate mortgage.

Medicare At 65+

65 or older? It may be time to enroll in Medicare. Read to learn if you’re eligible.

View all articles

Social Security Taxes

Estimate how much of your Social Security benefit may be considered taxable.

How Much Home Can I Afford?

With a few simple inputs you can estimate how much of a mortgage you may be able to obtain.

Impact of Taxes and Inflation

Estimate the potential impact taxes and inflation can have on the purchasing power of an investment.

View all calculators

Should You Tap Retirement Savings to Fund College?

There are three things to consider before dipping into retirement savings to pay for college.

Where Is the Market Headed?

We all know the stock market can be unpredictable. We all want to know, “What’s next for the financial markets?”

When Special Care Is Needed: The Special Needs Trust

A special needs trust helps care for a special needs child when you’re gone.

View all videos