Early in your career or as you get your business rolling, you may have a lot of value but be very short on cash. You may also be struggling under a heavy load of debt while you build your business. If something catastrophic happens, there are vehicles you can put in place to protect yourself and your loved ones against disaster.
Term Life Insurance
If you’re young and have a family or a spouse, it’s a very good idea to invest in term insurance. This insurance is playing the odds. If you die young, it will pay out quite a bit of money to those you leave behind. As you age, the benefits get smaller. Best of all, this type of insurance is much less expensive than whole life, so you can afford a large policy to cover your family while your kids are small. As your earnings increase, and you live longer, the payout decreases.
A will is not enough. Even if you have everything specifically stated in your will, your loved ones will probably need to go through probate. Instead, consider putting your assets into a living trust. In the event of your death, your belongings go into the trust to be dispersed to the beneficiaries in the order you determine them. First, they may go to your spouse and then to your children directly or through an executor. As your loved ones put their emotional lives back together, they won’t have to wait on the courts to plan their personal finances. Start your living trust early. Living trusts are key to estate planning and should be considered before retirement.
If you’re a small business owner or the only person in your household bringing in an income, then access to short- and long-term disability insurance payouts is critical. This insurance basically replaces at least a percentage of your income while you’re laid up. For small business owners, sole proprietors and artisans, both types of disability insurance are critically important. Whether you need to go through physical therapy after an accident or are facing involved medical treatment, this coverage can protect your family and may even help keep your business going while you mend.
Whatever you choose to do regarding how you protect your loved ones, both early in your career and at the end of your life, each of the methods listed above can limit your risk of leaving your family in the lurch. A living trust means an easy transfer after you’re gone while good insurance protection can protect your family from financial devastation.
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