The Financial Plan Most Young ProfessionalsSkip — Until It's Too Late
The Coverage Conversation Most Advisors Skip
The first time most young professionals think about life insurance, disability insurance, or estate documents is after something goes wrong. By then, the moment to plan has passed. Here's the coverage conversation most advisors skip because it's not glamorous — and why it may be the most important one you have.
Disability Insurance: The Biggest Underinsured Risk
At age 35, you are statistically far more likely to suffer a disabling illness or injury before retirement than to die. Your ability to earn income is your single most valuable financial asset — and it's almost certainly underinsured. Most employer-provided group disability plans cover 60% of base salary, exclude bonuses, and are often taxable at claim time. For a physician, attorney, or executive earning $500,000, that leaves a massive gap. A personal disability policy, ideally with an 'own-occupation' definition (meaning you're disabled if you can't do your specific job, not just any job), fills that gap. It's not exciting. It's essential.
Term Life Insurance: Get It While You're Healthy
Life insurance is priced on health. A 35-year-old in excellent health can get a 20-year, $2 million term policy for a few hundred dollars per month. Wait until 50, or until a health issue emerges, and the cost multiplies — or coverage becomes unavailable. If you have dependents or a mortgage, your death would create a financial crisis for people you love. Term insurance exists to help solve that problem cheaply and efficiently.
The Estate Documents Nobody Wants to Draft
If you're over 18, you need a will, a durable power of attorney, a healthcare directive (living will), and — depending on your situation — potentially a trust. Without a will, the state decides how your assets are distributed. Without a healthcare directive, your family may be left making impossible medical decisions without guidance. These documents aren't morbid. They're gifts to the people who love you.
Beneficiary Designations Trump Your Will
Here's the part most people get wrong: beneficiary designations on your 401(k), IRA, and life insurance policies override whatever your will says. If you named an ex-spouse as beneficiary on your 401(k) fifteen years ago and never updated it, your ex-spouse gets the money — regardless of your will, your remarriage, or anything else. Review your beneficiary designations every few years and after every major life event.
Disclosure
Raymond James and its advisors do not offer tax or legal advice. Life insurance and disability insurance are not deposits, not FDIC insured, and not guaranteed by any financial institution. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jim Maddux and not necessarily those of Raymond James.
