Are You Appropriately Covered?

Investments, investments, investments…  There is no question the primary focus for clients and their advisors over the past year has been the economy and the volatility in the stock market.  Certainly it makes sense that when the markets are down nearly 40 percent and every media outlet has the stock market decline as the lead story that our clients’ primary concern is their declining investment values.  This has resulted in many important and sometimes difficult conversations over the last year regarding long term investment strategies and the importance of rebalancing.

While eliminating mistakes that might be made in an investment strategy as a result of emotions, fear and greed is absolutely critical, it is important to also remember that the investments strategy is one element of a larger plan, one aimed at achieving long term goals and objectives.  In other words, it is important to keep sight of and review the other pieces of the comprehensive plan on a regular basis.

One of the planning areas clients often set aside for a later date is risk management.  Let’s be honest: Insurance is not everyone’s favorite topic.  However, although it’s not much fun to talk about ‘worse case scenarios,’ it is important to understand and review the coverage you have in place to ensure it is appropriate for your needs.  A good way to approach the topic is to ask yourself the following questions:

  1. Do I have appropriate disability coverage in place through company or personal policies?
  2. When was the last time I had my property &casualty insurance reviewed by a professional?
  3. How much coverage do I have on my home?
  4. In the event of a total loss, is my replacement cost capped at a certain level?
  5. Is the amount of excess liability coverage I have still appropriate?
  6. What are the limits on my personal injury and uninsured motorist coverage on my auto policies?
  7. Have I looked at my life insurance to ensure the death benefit is appropriate?
  8. Should this be transferred to an irrevocable trust?
  9. Should I consider looking at a new policy or an exchange since the mortality tables have improved?
  10. Should I consider Long Term Care Coverage?

It may be a lot more interesting to think about retirement, business succession plans, buying a new home, saving for college or reassessing your risk tolerance when it comes to your individual investment goals and asset allocation. But in the event of an unforeseen—and perhaps life-changing event—having the right risk management policy in place is as critical to achieving your goals and dreams as is your investment plan. Your Moneta Family CFO can help you consider the answers to the 10 questions posed here—and there may be others that are important to you and your family. Bottom line? Don’t put off this important discussionthis planning is a key part of your comprehensive plans.

Eric Kittner, CPA, CFP®


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