THE VALUE OF RISK MANAGEMENT
Everything in life involves risk, and one’s wealth is no exception. Risk management is designed to minimize financial and other potential losses associated with risks to your assets, health, or business.
It’s critically important for investors to evaluate the possibility of personal, business, and professional liability; property loss; catastrophic illness or disability; and the need for assisted living.
Part of our role as wealth managers is to help protect your well-being—and that may require us to help you insulate yourself from certain risks.
For example, prudent risk management may involve purchasing life, long-term care, and disability insurance, as well as a handful of other risk-prevention vehicles. When appropriate, we may choose to work closely with insurance specialists to focus on your risk management.
A good insurance strategy must be coordinated with your overall wealth management plan, and our objective is to ensure that you are comfortable with the level of risk you are taking in pursuit of your goals.
The Basics of Insurance
An insurance policy is simply a written agreement between you and the insurance company that outlines the promises the insurance company makes to you in exchange for your payment of a premium and your observance of certain conditions stated in the policy.
The promise by the company is an agreement to pay you and/or others in the event of a loss. Essentially, the risk of financial loss is transferred from you to the insurance company in return for your premium payments.
A word of caution, however: an insurance policy is a legal contract, and you should not sign it or pay your premium unless you fully understand all of its provisions. We can help to make sure that you understand the specifics, and we can assist in evaluating policies from several insurance companies.
Transferring Risk: The Goal of Insurance
We all encounter risks every day, from the possibility of an automobile accident to incurring a disability to becoming ill or even dying. Each of us also has some level of “risk tolerance”—the level of risk we are willing to live with in the both the short- and long-term.
In situations where you might not be comfortable managing the risk, we recommend considering insurance products. And the reason is straightforward: insurance can transfer the risk from you to the insurance company.
It may be true that insurance is not for everyone—but it may be right for you. As wealth managers, we will explore all possibilities to see that your exposure to risk is at the appropriate level for you.
Fixed insurance products and services are offered through Thorley Wealth Management, Inc.