Preparing for the Unexpected Q&A

Women typically live longer, make less money, work less, and take less risk than men. To amplify these challenges, women can also add additional vulnerability by not participating in their own financial future, delegating their financial decisions and control to someone else, not seeking to increase financial knowledge and financial self-efficacy, inability to negotiate, and not maintaining skills and experience to provide economic value in the workplace.

Exhale! We know it sounds scary when we list all of these. The good news is that you are here at StrongHER Money! Addressing financial vulnerability is one of the many reasons we created this community. By recognizing where we may fall short, we can find the strength to overcome these obstacles through education and community support!

The first question to ask is what exactly are you insuring? Is it income replacement for the primary income earner? Debt payoff? Is it the cost of childcare that would be incurred if the stay-at-home parent passed away? Once your concerns are addressed, a calculation can be performed to determine what’s needed for YOU.

An emergency fund can provide for unexpected financial events like job loss, short-term disability or medical costs. Three to six months of cash or other liquid assets is a rule of thumb for providing for emergencies. An emergency fund can be set up at one time or can grow over time through monthly saving.

The main reasons include privacy and control. A trust does not go through probate court so there’s no public record of what you have when you die and who gets what. A trust also allows you to control your assets when you’re no longer here since you can stipulate the timing of who inherits what in a trust. A trust can be expensive, though.

In most cases, your assets can go where you’d like them to go through the use of a will or a beneficiary form. You should know that a beneficiary form supersedes a will. Also, most insurance policies and retirement accounts have a beneficiary form on file. This means that the beneficiary form dictates who that account goes to regardless of what your will or trust says.

Insuring this cost does take age and health history into consideration – which may or may not be that expensive based on your specific situation. Another solution that we can explore for you is a hybrid life insurance/long-term care policy. These policies allow you to use some or all of the death benefit for long-term care expenses if that need arises.

If long-term care is not needed, the policy still pays the death benefit. These hybrid policies can be less expensive than traditional long-term care insurance in some cases. Get in touch with us to see what solution would be best for you.