My post of May 13th (Things To Keep In Mind) confirmed that many of our clients are currently reviewing the risk protection aspect of their estate plans in light of hopefully temporary pandemic related diminishment of business valuations, investment portfolios and employee benefit coverages.
It was interesting to read Rob Carrick’s article in the May 28th Report on Business entitled: “ It’s obvious to think about term life insurance these days….and smart too.” He writes: “ The pandemic has revealed a big but fixable hole in our financial planning for emergencies. It’s life insurance. All of a sudden this unpleasant, often ignored topic has got our attention.”
Mr. Carrick goes on to indicate that life insurance carriers have seen a recent surge in applications and as Kirsteen Etherington posted in her recent Trusted Advice article: (Underwriting in a Pandemic) carriers have responded:”by making available accelerated underwriting measures as many clients are reviewing their wills, powers of attorney and estate plans.”
Mr. Carrick refers to an industry formula of: “10 times your annual salary plus your mortgage balance and other debts.”
Brian Etherington’s article of May 14th entitled: (Just in Time vs Just in Case Planning: Incredible Times and Consequences) outlines two risk protection formulae, the first being the Value of Statistical Life ( VSL) created by US economists and adopted by the US Government and the second utilized for many years by Etherington Generations, The Stanford Economic Human Life Valuation.
Regardless of the formula, what is important is that everyone should be reviewing currently their own risk protection plan in these volatile times to ensure that any temporary offsides are addressed.
We are standing by at Etherington Generations and would be delighted to assist in this process.