By Joe Betcher
“If” is a word that society often takes for granted. It implies that circumstances could change in the future, but for many, attention isn’t given to “if” unless it becomes a reality that’s staring them in the face. In regards to personal finances, “if” should be a main focus. If something happened tomorrow, would your family be okay? Is your financial business in order? Have you thought about how much your family will need?
Younger people tend to procrastinate on financial issues, because they feel they have a lot of time. Even young couples, despite there now being two people to think about, often put off things today that they believe can be done tomorrow. As families are started and expenses increase, it becomes more and more difficult to financially plan for things that may happen.
Have you ever heard of a situation where an unexpected death has occurred leaving emotional and financial devastation in its wake? It happens every day. So why don’t people plan for what may happen? Usually, it’s because no one really wants to think about something terrible happening, but planning for “if” allows your family to know you cared for them enough to ensure that unforeseen circumstances would not be the worst case scenario.
Life insurance and disability insurance are two very important insurances that every family should have, especially if debt is a factor. One provides a death benefit payment if there is a death, and the other provides income if an injury or illness occurs preventing a person from working.
Many employees receive these insurances through an employer’s group benefits package, but there are many variables that need to be considered. Relying solely on an employer’s benefits does not always mean you will be well protected.
First, the amount of coverage for life insurance provided through an employer may not be appropriate for a family’s circumstances. Additionally, the amount of coverage can be reduced by the employer, or it can be completely taken away at any time. This is particularly troublesome, because a person will be older and may not qualify for a new policy.
As for disability insurance, most employers only do short term disability policies, because the employee can eventually receive disability payments from the government, if certain qualifications are met. Even then, it may not be enough to cover expenses.
In both situations, the employee is at the mercy of the other party. It is crucial for families to have a safety net in place. Not having enough insurance or relying solely upon an employer could ultimately lead to a financial disaster.