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Planning for Today

Have you ever known anyone whose car suddenly broke down and didn't have the money to fix it? Or who lost a job, only to spend months looking for another?

You can't protect yourself from everything. But you can cover the basics to buy the time you need — to repair or reorganize your life — when time is needed most. This is risk management.

Risk management refers to how you protect yourself financially against sudden setbacks. There are two basic tools you can use to manage risk: insurance and/or savings.

Insurance allows you to transfer or shift financial risk away from yourself to an insurance company. You pay a relatively small known cost (the insurance premium) to protect against a potentially large financial loss.

When you guard against the unknown with personal savings, you retain the risk of loss.

Step one:

Identify each area where you (or your family) could be exposed to financial loss. Generally, these include:

  • Health
  • Disability
  • Property
  • Liability
  • Death

It is important to give consideration to the types of risk that should be transferred (insured) and which ones to retain. Generally, this is determined by your ability to recover from a financial loss.

Step two:

Consider the following as it relates to each of the specified areas:

How am I, or those who depend on me, protected financially in the event a loss occurs?

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