Insurance, in one form or another, is a vital part of a plan in nearly every situation. Insurance shifts the risk of an event to others.
- Homeowner’s insurance. This shifts to others the risk of fire, theft, and other things which may happen to your home. It typically covers the contents, as well, up to certain limits. It may also cover liability for incidents related to your home, such as someone slipping on your sidewalk. Each risk typically has a separate limit.
- Auto insurance. This covers your vehicle’s value. As with homeowner’s insurance, there are typically portions covering liability.
- Umbrella coverage. Typically, this requires that you have underlying homeowner’s insurance and auto insurance with reasonable limits. It provides additional coverage once those underlying limits have been reached.
- Professional malpractice insurance. Professionals, such as doctors and lawyers, may have insurance in case of malpractice.
- Errors & Omissions. Corporations, boards of directors, non-profits, etc., may have “E&O” policies covering errors and omissions of officers and directors.
- Health insurance. This covers a patient for bills from doctors, hospitals, and other medical service providers, to the extent they exceed deductibles and coinsurance.
- Long-Term Care or “LTC” insurance. This typically covers a set amount per day for long-term care expenses.
- Life insurance. This provides funds upon the death of the insured. Of course, there are many types of life insurance, such as “term,” “whole life,” etc. Life insurance is often purchased by an Irrevocable Life Insurance Trust to keep the proceeds out of the taxable estate of the insured.
These and other types of insurance are some of the ways to protect a client from the risks of life. Insurance is one of the tools, along with a revocable living trust, which can make a complete estate plan.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
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