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News and Announcements: March 2016

News and Announcements: March 2016

Protect your Financial Security

One of your first financial goals should be to protect your family’s financial security from major catastrophes. To do so, consider these four items:

  • A cash reserve for short-term emergencies, such as a temporary job loss, major home repair, or large medical bill. A common rule of thumb states that your cash reserve should equal two to six months of living expenses. However, how much you’ll need depends on your age, health, job outlook, and borrowing capacity. You may need a larger reserve if you expect to be laid off or lose your job, you are the sole wage earner in the family, or your income fluctuates.
  • Adequate insurance in all major areas. Your insurance needs will change over the years, so you may find yourself with too much or too little coverage. Thus, periodically review your life, disability, medical, and home-owners’ insurance. Don’t overlook disability income insurance, which can be very important if you can’t work due to an illness or injury. Make sure your cover age replaces 60% to 80% of your income, cannot be canceled, and pays partial benefits when you can’t return to work full-time.
  • Umbrella liability insurance to protect against major lawsuits.

Umbrella policies are purchased in $1 million increments and kick in once limits of your homeowners and automobile policies are exceeded. In addition to the items covered by those policies, an umbrella policy typically covers damages from use of non-owned property in your possession and from lawsuits for libel, slander, defamation of character, and invasion of privacy.

  • A power of attorney. A power of attorney gives an individual you designate the power to act on your behalf when you are incapacitated, allowing him/her to take over your finances and make investment decisions.

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