In the lyrics of "Beautiful Boy (Darling Boy)" by the famous Lennon, he says "Life is what happens to you while you're busy making other plans." As a financial planner, it’s amazingly rewarding to plan successful retirements, education, legacy and your other life goals. And it is also my job to help you mitigate for the things that might hurt those plans, like job loss, disability, business downturns, and death.

When making your financial plan for success (let’s call it Plan A), we also have to address Plan B – What if life tries to derail you? How are you prepared for the common ‘what ifs’ that go awry in life?  Let’s talk about the Insurance (Plan B) that could help you successfully pursue your Financial Plan A.

If you lose your income – According the National Bureau of Economic Research since 1854 recessions occur about every 4.7 years (56 months) and last about a year and a half. In a recession, you could lose clients, people could buy less from you or even your spouse or partner who has a steady income could lose their job. That’s why many financial planners recommend 6 -9 months of your spending be put aside into savings. Unless you have a recession proof business, a savings buffer is most likely the best insurance you can get.

If you get hurt or sick – For most people, the ability to earn a living is the most important asset you could have. According to the Council for Disability Awareness, an average 35 year old has a 24% (female) and a 21% (male) chance of becoming disabled for 3 months or longer during their working career. On top of that, there’s a 38% chance that the disability would last 5 years or longer. Disability insurance, or "lost income replacement," is insurance that could replace or supplement a paycheck while you're out of work from an injury or illness.

If you lose a key person – The purpose of key man insurance is to help your company survive the blow of losing an essential person who makes the business work. Your company could be the recipient of a policy that helps your company pay debt and manage while you search for a replacement. If the company is just you and replaceable employees, you don’t need it, but many of my clients have partners where one is the sales and the other operations - both essential for business success.  If that’s you, check out key man (of course it’s not just men) insurance.

If you lose your health – The headlines are littered with both the cost of healthcare and the financial ravages to families without health insurance. A study by NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. Having health insurance potentially protects not only your family’s finances, but also your business’s finances.

If you lose your equipment/facilities – Business insurance could help rebuild your buildings and repurchase equipment if there’s a fire, flood, earthquake (yes, even here in PA) or other catastrophe that hinders your business operations.

If you need simple daily living help – Many people who have just had a parent, grandparent, or family member forced to leave their home for assisted living, come to me to see how to include these costs into their financial plan. LTC insurance may make it possible to stay at your own home as long as you can, since most of the payout tends towards paying people who are still at home.

If you can’t be there – Of course the most common possibility of achieving your goals when you can’t is Life Insurance. Life insurance could help your loved ones pay the mortgage, bills, or even college costs after you’re gone. It might protect your business from financial loss, liabilities, or instability. There are many possible ways to match protecting that your goals are met through life insurance. You could match the term of your insurance against the term of your goal, such as years till college. Or you can insure against the permanent need to cover estate and final expenses.

The good news is that as a business owner, there are many flexible ways to put some precautions in place for life’s ‘what if’s’ in order to protect your family and your business. Many of the options available can be made more affordable by looking into your unique needs. Also, if you or your spouse is an employee working for a small company that does not already have group benefits, there are even more affordable options.

Merra Lee Moffitt, CERTIFIED FINANCIAL PLANNER^TM Professional, is a Senior Partner at Good Life Financial Group, Wyomissing. She loves helping business owners pursue financial independence via their businesses. For solutions to your unique circumstances just call, click, or come by at 610-628-2055, www.Welcome2TheGoodLife.com/MerraLee, or merralee.moffitt@lpl.com.

http://www.nber.org/cycles.html

http://www.disabilitycanhappen.org/chances_disability/disability_stats.asp

http://www.nerdwallet.com/blog/health/medical-bankruptcy/