Insurance and Financial Products: A Perfect Marriage?

If you think about it, most financial products are basically insurance anyway; insurance to keep your lifestyle relatively the same after retirement, or insurance to keep your family from losing everything if you go into a nursing home. They are all meant to do the same thing: protect you and your family from a loss. If possible, it simply makes sense to purchase both insurance and financial products from the same agent, as more and more of the big insurance companies are providing financial products right along with other insurance policies.

We all know how uncertain Social Security is. Whether it will even exist at the time of your retirement is a real concern, no matter what your current age is.

Even if it is available, most people only receive around 40 percent of their pre-retirement income amount. Think about what you are living on right now, and then think about having sixty percent less available to you, sound good? Of course not, no one wants to spend their golden years scrimping and saving, they want to live better than they are now. That is where good solid planning comes into play.

Insurance protects you both in the long term and in the now. If you become sick or injured without insurance, who will pay for your medical expenses? If your home is destroyed, or your vehicle wrecked, good policies will replace those items and give you the peace of mind that your family is taken care of.

Your insurance policy can also include coverage against long term care placement or a devastating disability, both of which could eat through a family’s savings in a matter of months. Spending a little more now can save you big money in the long run.

Most financial products, including annuities, can protect against the future spent eating cat food in a one room shack. If you plan carefully, you will be spending your golden years in relative comfort, without medical debts looming over you and without having to drastically alter your lifestyle. You should not have to give up every small luxury simply because you are retired. And planning on employer paid pensions alone is foolhardy at best. If you are lucky enough to have such a benefit in the first place, most will only cover 25 percent of your pre-retirement income. Hardly seems worth it, does it?

A financial planner can provide you with the best plan for your own personal situation, as well as advise you about how much and what type of insurance you need. Buying both types of products can insure that you do not needlessly double up on one or the other, and that you are covered for all contingencies. But there might be some problems with this practice.

Just as there is no truly “perfect” marriage, the joining of financial planning and insurance can have its problems.

If you go to a financial investment broker, he or she will, of course, push more of the financial products on you, as their commission for these is usually higher than insurance policies. The available insurance from such places is limited, and in some cases, not worth the added expense. The same thing can also be said for insurance agencies that carry financial products. They may not be as well informed about the financial products that they offer, and will emphasize the insurance aspect. Some companies have separate departments for each category, so that you can use the same company but talk to experts in their respective field.

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