Does Your Life Include a RIPE Plan?—Planning Tips for Retirement, Investing, Protection, and Estate Planning – Part 3 (Protection) by: Janet L. Hall

Protection Planning – What IF?

What if something should happen to you, a family member, or one of your costly possessions? Are they protected?

Just like your computer should have protection against * viruses *, your assets, family, and self also need to be protected.

First, let’s look at some assets that might need protection:

~~ HOME
If you are buying a home, you are usually required to have homeowners insurance, and depending on what area of the country you live in, you might need additional insurance protection, such as for natural disasters: hurricanes, tornadoes, earthquakes, flooding, and just regular old storms!

If you are renting a home, apartment, townhouse, or condo, it is also a good idea to look into renters insurance to protect your belongings.

~~ AUTO
If you have an auto, you are probably required by law, depending on where you live, to have auto insurance. If the car is still being paid for (you have a loan against the car) you have to have full coverage, which is more costly.

~~ EQUIPMENT
If you’re a business owner, you’ll need to protect all your company assets, and if you rely on your computer to make a living, get some protection for it ASAP!

You can get protection * in case of death * that will pay off your home, auto, and some other bills.

You can get protection * in case of disability * that will help you pay your bills while disabled.

Today, make a list of all the assets in your life that are protected, and review the coverage you already have to make sure it meets your needs.

Make a list of all the assets in your life that AREN’T protected, and find out what kind of protection is available, the cost, and if there is a real need to protect them.

And don’t forget if you use your hands, such as a pianist, or your voice; such as a singer to make a living, these too are assets that need to be protected!

Second, let’s take a look at some of the protection you and your family might need, such as life insurance.

NOTE: I’m going to skip over Health Insurance because I wrote about that in the March issue (see Puzzled by Your Insurance Coverage? Let’s OverHall the Pieces! At http://www.overhall.com/mar00.htm ). If you’re new to OverHall IT! or have forgotten about this, I urge you to read and review this article.

Life Insurance can provide you and your family with financial security as protection or as an investment.

The purpose of life insurance is to fill the gap between Social Security, Investment Income, and any other sources of income your family might receive, and THEIR needs after you leave this World.

So, how much insurance will you need to replace your income, and to take care of your families needs?

If you’ve been doing the OverHall IT! exercises for the past six months, you’ve got a head start on evaluating these needs.

According to life-line.org, “While there’s no substitute for evaluating needs, one rule of thumb is to buy life insurance equivalent to five to seven times your annual gross income.”

Life-line.org has a needs calculator that can help you with your evaluation, but basically you need to gather up your financial information and sit down and play the * what if * game.

NOTE: I realize that this subject matter might be too hard for many of you to think about, talk about, or even plan for, BUT it is a VITAL part of OverHalling and bringing Balance to the financial area of your life. True, many of us think * that will never happen to me *, or think you’ll stay healthy and young forever; sadly, this is not the case for ANY of us. Everyone must leave this World at some time, we just hope it’s later then sooner. With that said, let’s continue.

First look at what kind of anticipated illness expenses and funeral expenses your loved ones will need to make IMMEDIATELY.

Remember, you are playing the * what if * game and you need to cover all bases, so to speak.

Next, add to that your total monthly family budget; this should be slightly less now that you are gone. Do this as above: budget today, ten years, different ages, different scenarios.

Next write down any income your family might receive from any of the following:

~~ Your assets (savings, stocks, real estate investments, etc)
~~ Social Security Benefits ~~ Survivors Benefits from your pension plan ~~ Your spouse’s salary and/or pension ~~ Other sources

Total these items and you have total income available without life insurance.

Now you need to subtract the total income your family receives from income required (your monthly budget expenses).

Write down the number of years income is required (spouse’s life expectancy).

Next multiply your required income by 12 and by the number of years for your spouse’s life expectancy.

Subtract the amount of insurance you already have. Add in the last illness and funeral expenses.

Your total will be an approximate of how much life insurance should be maintained.

Please remember, as your lifestyle changes, your insurance needs might change.

This is a lot of work, I know, but isn’t your family worth it?

Now what if you don’t have a family, children, or anyone that relies on your income? Then you probably don’t need life insurance, unless you want to be a nice relative or friend and leave some money to others in your life .

Do you need to buy life insurance for your children? I say no, unless your child is a movie star or bringing in income that the family relies on. However, you can get life insurance for children that you would use as an investment for future expenses, such as a college.

Do your homework first, and then you’re ready to go and have a serious talk with your insurance representative.

All this insurance, protection, and coverage can become very costly, being prepared and KNOWING what you WANT and NEED will aid you in making the correct decisions.

Remember, this is YOUR life, and your families, please take care of both, now, before a * what if * really happens to you.

TIP: Don’t forget to look at the need you might have for Long Term Insurance.

NOTE: Sometimes, and some people look at Asset Protection Planning as a way to avoid future lawsuits, financial privacy, reduce liability insurance costs, and a way to save on income and estate taxes. To find out more about asset protection strategies, go to http://www.rpifs.com/lawsuits/apbeneft.htm

Next month Part 4-the E in RIPE!

Smiles, not Piles,
The Organizing Wizard, Janet L. Hall, is a Professional Organizer, Speaker, and Author of 'Secrets of a Professional Organizer and How-To Become One.' She is the owner of
OverHall Consulting and Organizing By Phone. Subscribe to her FREE organizing newsletter at http://www.overhall.com/newsletter.htm or visit her web site at http://www.overhall.com

Copyright Ó 2000 by OverHall Consulting P.O. Box 263, Port Republic, MD 20676 All Rights Reserved. Permission is granted to reproduce, copy, or distribute so long as article is kept intact, this copyright notice and full information about contacting the author is attached.

Smiles, not Piles,
The Organizing Wizard, Janet L. Hall, is a Professional Organizer, Speaker, and Author of 'Secrets of a Professional Organizer and How-To Become One.' She is the owner of
OverHall Consulting and Organizing By Phone. Subscribe to her FREE organizing newsletter at http://www.overhall.com/newsletter.htm or visit her web site at http://www.overhall.com