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The Road To Financial Empowerment: Part 1 - Protection

*This is part one of a three part series on Financial Empowerment and the importance of understanding Protection, Savings, and Growth

When you hear the word Protection, what comes to mind?

Do you think about your home, your children, your life, your country, your things?

Did you know that 70% of U.S. households with children under 18 would have trouble meeting everyday living expenses within a few months if a primary wage earner were to die today? Or that 4 in 10 households with children under 18 say they would immediately have trouble meeting everyday living expenses? (Source: LIMRA Household Trends in U.S. Life Insurance Ownership, 2010)

There are many reasons people fail to adequately evaluate their protection. Some would rather focus on their retirement plans or investments. Others don’t want to believe anything bad could ever happen. But the reality is that failure to make good protection decisions can result in significant loss for you and your loved ones. Therefore, it is critical to look at all the various aspects involved, which includes insurance policies, social security benefits, and legal documents. Remember, once a mistake is made in the area of protection, it may be difficult to correct it.

To help you get started, take a look at your legal documents. Have you taken the time to draft a Will, a Living Will, a Health Care Proxy and a Power of Attorney? Have you indicated who the guardians would be for your minor children? Have you listed alternates in case your first choice isn’t available? If you die without a Will; dying intestate, the State will provide one for you and it will likely not be exactly like the one you would have written for your family. Don’t delay in preparing and protecting your family. Get a Will and advanced directives drafted today so you can be certain your wishes are implemented.

When it comes to protecting our homes from harm or loss, are you certain proper planning is in place? Ask yourself, if my home were to burn down tomorrow would I want to rebuild it exactly the way it was or less than what I had? I’ve never heard the response, “I’ll take less than what I had.” This is why when you purchase a Homeowners Policy you should choose the full replacement protection. This includes the contents and the structure. Double check your personal policies to see what is included and have photos or video to verify the contents within the home. This will make the claims process easier if an event does happen. In addition, make sure you are protected in the event an injury was to occur on your property. Failure to have proper liability coverage can drastically erode the other important wealth building plans you have in place.

Protecting our assets and families must also include some form of Disability and Life Insurance. Life insurance amounts should be for economic life value or full replacement value of the asset you are insuring. Disability Income insurance is designed to replace as much of your income as possible in the event of a disability. Most people look at disability and life insurance as an expense rather than a necessity, however with proper guidance you can maximize your benefits at minimal cost. If it is important enough to have full replacement value to protect your home, shouldn’t you have the same full replacement value to protect your income and assets? After all, the most valuable asset is your ability to earn an income.

When you work with a Leap Professional, you will always start with evaluating your protection first. When bad things happen in our world we all want to know that our hopes and dreams will still come true; even if we are not around to see it. Whether it’s your assets, your income or your life, protection is vital. It is never too late to start.

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