Make Insurance Part of your Plan

Published: June 28, 2021

Insurance should be an integral part of your wealth plan to help protect you, your family, and your assets. In honor of National Insurance Awareness Day, which is Monday, June 28, here are some tips to make sure your insurance is sufficient for your individual circumstances.

Keep your insurance up to date with your situation. Whether it’s insurance coverage for your property or your life, your coverage should align with your current circumstances. If you have hard assets such as real estate, art, or jewelry, their value may appreciate significantly over time. It is a good idea to take an inventory, and accurately appraise your belongings on a regular basis. This helps eliminate gaps between the insured value and fair market value. For life insurance, if you have a term policy, you may not need the same level of coverage when you retire and are no longer earning income or if some major obligations, like funding education or paying off a mortgage, are in your past. In some cases like that, you may want to decrease your coverage level from where you originally set it. Conversely, if your career or family situation has changed, and your income has significantly increased, or you are now the sole contributor to your family’s income, you may want to increase the value of your policy. 

Consider all sources of protection. Depending on your employment status, you may receive some insurance coverage from your employer, such as life insurance, health insurance, or short- or long-term disability. If you do have various sources of coverage, it may take a little extra effort to accurately understand your complete insurance picture. But ensuring you have included each one is worth the time. All of this insurance should be considered to determine if you have adequate coverage should you no longer be there to provide for your family or are temporarily, or permanently, disabled. Klingenstein Fields Advisors can help you quantify the coverage that you have and determine if you need additional coverage through insurance or to set aside funds in an emergency pool. 

Look to the future. Life insurance can be a valuable tool to help you expedite liquidity to your heirs, as the proceeds can be paid out to named beneficiaries quickly, without going through probate. This relatively quick payout can be particularly helpful if the value of your estate is above the exemption amount ($11.7MM per individual or $21.3MM per married couple in 2021, plus potential state estate taxes – New York’s Basic Exclusion Amount is $5.93MM in 2021). If your estate consists of illiquid assets or assets your heirs wish to keep – like a business, a home, or a vacation property – the proceeds of a life insurance policy can provide the necessary cash for tax payments. In addition, you can designate your cherished cause as the primary beneficiary on a current or new policy. This can help you realize your philanthropic goals while still preserving other assets for your legacy. 

Klingenstein Fields Advisors welcomes the opportunity to meet with you and discuss insurance, providing for your family, and estate planning strategies that may be appropriate for your unique circumstances. Klingenstein Fields Advisors and its affiliates do not underwrite or sell insurance, so we provide independent advice and guidance based solely on your needs and circumstances.


Important Disclosures

This material is provided for informational or educational purposes only and should not be construed as investment, accounting, tax or legal advice. Always consult a financial, tax and/or legal professional regarding your specific situation. This communication is not intended as a recommendation or as investment advice of any kind. It is not provided in a fiduciary capacity and may not be relied upon for or in connection with the making of investment decisions. Nothing herein constitutes or should be construed as an offering of advisory services or an offer to sell or a solicitation to buy any securities or a recommendation to invest in any specific investment strategy. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future returns. The views expressed herein are as of a particular point in time and are subject to change without notice. The information and opinions presented herein are general in nature and have been obtained from, or are based on, sources believed by Klingenstein Fields Advisors (“KF Advisors’) to be reliable, but KF Advisors makes no representation as to their accuracy or completeness. Although the information provided is carefully reviewed, KF Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. KF Advisors represents two investment advisers registered with the Securities and Exchange Commission: Klingenstein, Fields & Co., L.P. and KF Group, LP. If you are a KF Advisors client, please remember that it remains your responsibility to advise KF Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.