You are likely to need life insurance if others depend on you for financial support, if you provide your family with such services as child care, if you need to consider protecting a surviving spouse or if you have accumulated substantial assets. There are several types of life insurance that you may want to consider. (more…)
“We devote much of our lives to making and living out our long-range plans. We go to school, have children, plant gardens, and save for the future with the expectation that we’ll see the fruits of our efforts. Probably for our benefit, the working out of these plans is full of surprises, often pleasant ones. It’s part of what makes life interesting and worthwhile. Some of the surprises, though, bring bad news, even tragedy.”
Richard E. Vodra, CFP®
Enough Money!: How to Create and
Manage Financial Success in Your Life (more…)
You are likely to need life insurance if others depend on you for financial support, if you provide your family with such services as child care, if you need to consider protecting a surviving spouse or if you have accumulated substantial assets. There are several types of life insurance that you may want to consider. (more…)
By Brad Elman
As soon as we become parents, we’re focused on—and understandably a bit obsessed with—protecting our kids. We swaddle them to shield them from a chill, and we buckle them up in the stroller and car.
That urge to safeguard our children never ends, no matter how old they get. For parents of kids with special needs, that urge to protect is nothing short of fierce, because we know that our kids will be relying on us for their whole lives … and even after we’re gone.
By guest blogger: Randy Schneider
As the old adage goes, “You do not have to be a billionaire to be sued like one.” The fact is a single lawsuit, even if you win, can end up costing hundreds of thousands of dollars and sometimes in excess of a million dollars. In today’s society, more people file lawsuits for more money than ever before. The personal liability coverage available through a homeowners or automobile policy is simply not enough to protect you. An umbrella policy can offer a higher level of liability coverage protecting you and your family from damages for which you may be held responsible. The greater your assets, the more you potentially have at risk. Umbrella coverage can help protect you against personal liabilities that could attack a substantial portion of your current assets, future assets or future earnings.
A personal umbrella liability policy is an insurance contract designed to increase the liability protection over and above a standard home and/or auto insurance policy. The personal umbrella extends your liability protection beyond the primary policy limits – usually sold in million dollar increments. An umbrella may be obtained once your home and auto insurance policies meet a minimum “attachment point” (typically, a liability limit of $250,000 or $500,000). Personal umbrella policies provide four elements of coverage:
Underinsured first party bodily injury pays for her excess medical bills, pain, suffering, modifications to your home and a wheelchair accessible van.
While many financial advisors recommend that your umbrella policy be equivalent to your net worth, they neglect to consider risk factors that could leave you exposed. A judgment against you may exceed your entire savings. All of your assets are at risk – even your home and future earnings. We recommend that clients review risk factors as a measurement of exposure. Affluent individuals and families that have five or more factors should consider an umbrella policy of at least $5 million. Those with six or more factors may need a $10 million umbrella or higher.
Risk Factors:
Umbrella coverage can help protect you against personal liabilities that could attack a substantial portion of your assets or future earnings. For a few hundred dollars a year, you may add an umbrella policy or increase your policy limits commensurate to your growing assets and “risk factors.” Talk to your personal insurance agent regarding this important coverage.
The price of an umbrella policy depends on three main rating factors – the dollar limit of coverage, the number of properties owned/rented and the number of automobiles/watercraft owned. The cost associated with automobiles and watercrafts are much higher than the cost for each property location.
For example, the premium for a $5 million umbrella for an individual with one home and one auto ranges from $270 to $550 per year. The cost of a $10 million umbrella for a family with two homes, one rental property and three autos ranges from $970 to $1,750.
A handful of specialty insurance companies (notably: ACE Private Risk Services, Chubb, Fireman’s Fund and Chartis Private Client Group) offer unique or expanded options, such as:
Fort Point Insurance Services, Inc. provides comprehensive insurance products and services to help meet the unique risk management needs of affluent individuals and families. Working with clients and their most trusted advisors, we analyze coverage gaps, identify potential loss exposures, and recommend proper limits of liability to protect both property and financial assets. We accomplish this by drawing on our relationships with the nation’s most respected insurance carriers, and from our own experience in serving the private client personal insurance market. Based in San Francisco, we work with individuals and families across the United States and around the world.
Randall Schneider
Assistant Vice President
Fort Point Insurance
www.fpins.com
Mr. Schneider began his insurance career at Selective Insurance, in Baltimore Maryland, after Graduating from Ithaca College in Ithaca, New York in 1995. At Selective, he served as an Underwriter, and as a Business Systems Analyst. In 1999, Mr. Schneider joined the Chubb Group of Insurance companies, in Boston, Massachusetts, where he spent eleven years as an E-business Consultant, Marketing Specialist, and most recently, as Assistant Vice President and Regional Manager in charge of Chubb’s Personal Lines Operation in Northern California. Mr. Schneider lives in Oakland with his wife, Andrea, and son Cody. He and his wife are avid skiers, travelers, and love to eat foods from around the world.
If your “to-do” pile contains a bulging file of paperwork for your tax return, you have plenty of company. The months leading up to April 15 are when everyone gathers and reviews their W-2 forms, investment statements and donation receipts.
These first few months the year—when your finances are front and center—is the perfect opportunity to start (or continue) building financial security. There’s nothing more powerful and comforting than feeling confident about your financial future.
If you’re stuck or don’t know where to begin, these five steps will get you moving:
1. Know Your Numbers: This is one of the most powerful steps you can take. Add up all of your assets: bank and investment accounts, college savings accounts, all retirement plans, the value of your home and other real estate, cash-value life insurance and all other assets.
Then, subtract all your debt: mortgage, car loans, student loans, and any rolling credit card balances. The result is your net worth, a critical piece of your retirement plan. The level of net worth is not as important as its growth over time. Focusing just on assets, it may seem that you are not getting ahead – especially when the investment markets are down. But paying off debt has the double benefit of increasing your net worth and decreasing your future interest expenses.
Next, calculate what you spend. “I don’t want to track every latte and People magazine,” one of my clients moaned. But I encouraged her to do it anyway, even just for a week. If you don’t know where your money is going, then you can’t create a specific plan to add to savings, pay down debt and move yourself along the path to financial freedom.
You can track spending with software like Excel or Quicken. I’ve turned many of my busy clients on to www.mint.com, and I use it myself. This free tracker is easy to use and secure. Once you set up your account, Mint’s software automatically tallies your expenses, assets and debts. It even prepares helpful pie charts and budgets. And you can access it as a mobile app too.
2. Create a Vision: What does financial freedom mean to you? Here’s what some of my clients have said:
Dream big! Choose something that inspires and motivates you. Consider creating a “dream board” with your partner or a friend, using pictures showing the life you imagine yourself having.
3. Be SMART: What steps can you take today, next week, next month to move yourself and your family closer to that vision? Work backwards from your vision to create goals that are Specific, Measurable, Achievable, Realistic and Time-Based. They’re the ones most likely to succeed.
Our financial goals move within reach when we make them automatic and tangible. My clients “Mimi” and “Scott” recently set up an auto-transfer to move $100 each month from their checking account into a 529 college savings fund for their 2-year-old son, Taylor. That may not seem like much, but this investment has 16 years to grow. And these parents are so excited about this painless way to save that they’ve vowed to increase their monthly investment when Mimi returns to work.
4. Educate Yourself: I know, numbers are “not your thing.” They can be overwhelming, depressing and scary, especially when you’re thinking long-range. So take small steps. Read an investment site—I like the practical advice in Money magazine and the tools and tips on the Financial Planning Association Web site http://www.fpanet.org/.
5. Get Support: When you became a mom, many people shared meals, gifts and encouragement. Tap some of those supporters as you create and implement your financial plan. Professionals—your accountant, estate planner or financial planner—can do some of the heavy lifting for you. But ultimately, only you can shoulder the responsibility of making sure you’re planning today for the future of your dreams.
