Bridging the Insurance Gap: A Holistic Approach to Protection

As one of the newer Advisors at TCI, one thing I’ve noticed is our overall sense of optimism. From our investment philosophy to our core values, we tend to believe that positive outcomes are the norm. However, part of maintaining that optimism is being realistic about potential risks. By planning for what could go wrong, we can stay positive even when life takes an unexpected turn. Insurance planning, in particular, makes us confront those uncomfortable “what if” scenarios, ensuring we’re prepared for whatever comes our way.

While it’s not the most glamorous part of financial planning, it’s a crucial one. This is why we emphasize being prepared for those “what ifs.” We don’t sell insurance, but we consistently stress to our clients the importance of having the right types and amounts of coverage. It’s an essential part of any well-rounded financial plan, and at TCI, it’s never overlooked.

Whether it’s life insurance, disability, personal liability, or casualty insurance, proper coverage can help prevent a catastrophic event from derailing your financial plan. While we’re not an insurance agency or affiliated with one, we work with trusted partners to ensure our clients get the protection they need.

Ultimately, our goal is to help our clients grow their wealth through investing, tax planning, and comprehensive financial strategies, but protecting that growth is just as important. That’s where insurance comes in. Whether you’re protecting your heirs with life insurance, your income with disability coverage, your home with casualty insurance, or your assets with liability coverage, having the right protection is key to safeguarding the future you’re building.

Identifying Gaps in Your Coverage

As part of our financial reviews with clients during the year we review their insurance coverage in various areas. These might include:

• Life insurance
• Disability insurance
• Long-term care insurance
• Homeowners insurance
• Umbrella policies
• Professional liability insurance

Often clients assume their coverage is adequate but gaps can exist and go unnoticed by clients. We use a number of tools to help with our review including Holistiplan, our trusted professional insurance partners and our own years of experience in helping clients ensure their insurance needs are met.

Life insurance is a common area where we find clients may be underinsured. Insurance coverage may not keep up with changes in the makeup of their families and growth in their incomes and assets.

The recent hurricanes that hit Florida, North Carolina and much of the Southeast are a reminder of the importance of making sure that your homeowner’s policies are up-to-date, and the amount of coverage has kept up with the value of your home.

An issue we’ve encountered in a few cases is with a client’s mortgage being sold to another mortgage servicer, but the escrow payment for their homeowner’s insurance did not transfer with the mortgage. Left unnoticed, this could lead to a lapse in your homeowner’s policy which could be catastrophic in the event of a fire or a natural disaster causing extensive damage to your home. Without proper coverage the out-of-pocket costs to repair or replace your home could be devastating to your finances.

How Being Properly Insured Safeguards Financial Futures

Being properly insured helps safeguard your financial future in several ways.

Mitigating risks

Insurance is about minimizing your financial risks. Disability insurance is a prime example. Statistically you are more likely to suffer a disability during your working years as opposed to dying.

Having an appropriate level of disability coverage is critical to ensuring an ongoing stream of income should you suffer a disabling medical condition. A loss in income on a temporary or permanent basis can be devastating and cause a permanent reduction in your lifestyle. We review your disability coverage as part of our periodic overall client financial reviews.

Many clients get their disability coverage from their employer as part of their employee benefit package. This coverage is fine as far as it goes in terms of coverage, but there may not be portability of coverage if you leave that employer.

We can review your disability coverage and help you determine if it is sufficient for your needs. If additional coverage or perhaps a different type of policy is needed, we work with our insurance partners to determine your coverage needs and to obtain the right coverage for your situation.

Securing Your Assets and Your Legacy

Life insurance can help ensure that you are able to leave a legacy for your heirs upon your death even if you have not had the time to accumulate the type of estate you were striving towards. Having the appropriate amount of life insurance coverage is an important part of your planning and we help clients in determining the level of death benefit needed and the type of policy that is most appropriate for them. For younger professionals starting a family a term policy might be the right option since you can buy a large death benefit for a relatively low premium if you are in good health. Over time your life insurance needs may evolve, and we review this with you and help you make the coverage adjustments that are needed.

Collaboration Between Insurance and Financial Planning

We view insurance as a key part of the financial planning process. Unfortunately, all too often we see a disconnect between financial advisors and insurance professionals working for the same client. With the importance we place on proper insurance coverage of all types for our clients, we help facilitate communication with the insurance professionals serving your needs to ensure that you have the proper levels of coverage and the right types of insurance for your needs over time.

This communication includes suggestion coverage changes and updates to ensure you are properly covered as your wealth grows. Insurance often needs to be adjusted to cover newly acquired assets, protect against evolving risks. Insurance agents often focus solely on providing policies that protect against specific risks, while Advisors look at the bigger picture.

Peace of Mind Through Proactive Insurance Reviews

It’s important to review your insurance policies regularly, whether annually, every couple of years or as things change in your personal or professional life or with your finances. At TCI, we do this to determine if your various insurance coverages still meet your protection needs or if any adjustments are needed.

These adjustments could include a new policy, a new type of policy, adjusting policy limits or other changes. We make sure that your insurance coverage is aligned with all aspects of your life.

Insurance can be intimidating. We work with our clients to take the complexity out of the insurance planning process. It may not always be apparent to our clients why a particular type of insurance coverage is needed. As independent fee-only Advisors who receive no monetary compensation from your insurance purchases, our mission is to guide you to the right types of coverage for your situation.

For clients who own a business, we help you look at the various types of business insurance that you might need. Perhaps you have business partners and have a buy/sell arrangement in place in the event of the death or disability of one of the partners. It’s important to ensure that this arrangement is backed by appropriate life and disability policies to ensure that the family of a partner is properly compensated for the value of the business in the event of their death or disability. You could be that partner, and you certainly want your family to be properly compensated.

Business liability insurance is critical for business owners to protect what is often their largest investment against claims from customers or others. For clients who are in professions like law or medicine, professional liability insurance is a key type of business insurance they will need.

We review these and all types of insurance coverage to ensure that our clients have the right types of policies and the level of coverage they need.

At TCI we take a holistic approach to financial planning. This includes mitigating our client’s risk levels through the proper use of insurance. We strongly believe that insurance isn’t about “throwing money away,” it’s about peace of mind, protecting against unforeseen losses, and safeguarding financial futures. We hope the coverage isn’t needed, but if it is proper insurance coverage is often viewed as a solid investment in your future by our clients.

TCI Wealth Advisors is an SEC registered investment advisor. This information is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any insurance products or investments. TCI is not an insurance broker and no portion of its services should be construed as insurance advice. TCI does not sell insurance products. If there is a specific question regarding your insurance coverage, costs or premium options you should contact your insurance broker.