Financial planning represents an integrated approach to the development and implementation of plans for the achievement of individual or family financial objectives.  Although financial objectives may differ in terms of individual circumstances, all integrated financial plans should include an analysis and recommendations that satisfy individual protection of wealth  and income objectives.

While plans for the accumulation of wealth may be more exciting, the protection of that accumulated wealth cannot be overlooked.  To find some method of protecting assets, or preserving the wealth represented by those assets, is the challenge people face, that is, the risk they face.  Technically, a function of insurance is to reduce or replace uncertainty.  However, insurance is more understandable if its function is stated as a reimbursement for the loss sustained.  Loss is the undesirable end result of risk and is defined as the decrease or disappearance of value, usually in an unexpected or relatively unpredictable manner.

As you work toward formulating and implementing an integrated plan to meet your financial objectives, it may become apparent that the resources available to you are limited to the assets  you own and your ability to produce income.  In the event that either one of these resources are reduced (or disappear), your ability to meet your future financial objectives would be less than bright.  However, by taking the appropriate steps to properly protect both of these “assets,” you will ensure that your financial planning objectives will be met unhindered.

PROTECTING EXISTING ASSETS

It is essential that you have an adequate level of homeowner’s insurance which takes into account the replacement value of your home, vacation property, furnishings, and other such assets.  In addition, an adequate level of automobile insurance must be in place to protect you from a major property loss through accident or theft.

PROTECTING INCOME

A sufficient level of life insurance will allow for the replacement of a future income flow interrupted by death.  Disability income insurance (most often overlooked) will provide income during a time period when the ability to earn income is not possible due to a disabling accident or illness.

PROTECTING BOTH

An acceptable level of liability insurance and health insurance prevent the eroding of your existing asset base and the potential use of earned income for unexpected emergencies.

Protecting the assets and income potential which you already possess is an essential step in preparing to meet your future financial objectives.  The following pages reflect our analysis of your present insurance program, with our recommendations concerning its appropriateness.

To your success,

Joe Maas, CFA, AVA, CFP®, ChFC, CLU®, MSFS, CCIM
President of Synergetic Finance