Basic Risk Management Planning.....

When reality sets back in, prudent financial planning shouldn’t be based on the next trip to Vegas or hitting the lottery - or luck of any kind.   Nevertheless, the quest for "luck" is an easy path that simply highlights the importance of financial planning and risk management.  When your clients plan for risk, the calculations are based on the “odds” of specific life events.  For example, clients who own their home almost universally carry homeowners insurance.....even though the risk of seeing that home burn to the ground is just 1 in 16,000.  Why?  Because it's probably their largest asset, and they want to protect it or the liability arising from it.  

Then there's life insurance!  Unless your clients have located The Fountain of Youth and they are no longer concerned with mortality, this risk management topic is cut and dry.  Yet, according to a LIMRA/Life Happens study, ownership of life insurance "has remained relatively steady since 2021, with about half of adults reporting having coverage."  

And Then There’s Morbidity..... 

Most of us recognize that we’ll get sick throughout our lifetime.  That means we should be covered by health insurance or Medicare and manage the risk as it pertains to our health – now and into the future.  Unfortunately, when it comes to the risks associated with a need for some healthcare - Long Term Care - most Americans fail to adequately plan ahead, as chronic or age-related illnesses are NOT covered by health insurance or Medicare.  

Want a different look at "playing the odds"?  If your clients rush out to buy the winning lotto ticket or head to the park in search of a four-leaf clover, they probably know the odds of finding either are extremely low.   Perhaps, on the flip side, you'll help remind them that about 60% of Americans will experience a need for LTC services during their life.  With those kinds of odds, it may be time to consider the impact of future Long Term Care needs and help them eliminate hope or luck from their financial and risk management planning!

Long-Term Care represents a substantial risk as clients age, so rather than hoping for luck, you may want to encourage and work with them to implement prudent planning. 

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