There are some insurance policies you never want to use—like property and casualty or disability insurance—you establish them in case of emergencies, but if life went as planned, you’d probably rather these policies remain “unnecessary.” After all, most people don’t want to have their home vandalized or get injured and be unable to work. But life happens, and when disaster strikes, it’s good to have a cushion to fall back on.
That said, many policyholders don’t understand the full scope of their insurance coverage. Some people purchase policies simply because their advisor recommended it, or they think it’s “the smart thing to do.” And while having a protection plan is an important step toward financial security, it’s also important to understand just what you’re paying for and what benefits you have in case you need to use them.
Maximizing Benefits: A Case Study
Recently, a woman named Erica sought my financial guidance because she was going through a difficult time in her life. She was a dental hygienist who had recently been injured and couldn’t keep working. As a single mom, she felt stuck, trying to make ends meet and navigate this unexpected roadblock.
Without her steady income, she was facing a lot of uncertainty—she didn’t know how she would keep up with her bills, make mortgage payments, and cover day-to-day expenses. She had done some financial planning with another advisor, but now that her situation had changed, she wasn’t sure how to use her plan—so she reached out to our firm for help.
How We Helped
When I researched her account, I discovered Erica already had significant disability benefits–she just needed to find the best way to use them. I helped her understand and augment the plan she already had, and in doing so, she was able to maintain her lifestyle—by fully leveraging her policy, she covered all her expenses and even set up a savings plan.
The incredible thing is, these benefits weren’t something we established for her—she set them up long before we met, but because she didn’t realize all she was eligible for, she almost lost out on years’ worth of income she and her family desperately needed. She hadn’t read her contract (which isn’t unusual for busy professionals), and her previous advisor hadn’t discussed her coverage with her. But because we asked the right questions and took time to dig through the details, we discovered she had more options. Without our help, she would have received some benefits, but nothing close to what she was eligible for.
Erica’s injury took some time to heal, and last we spoke, she was still collecting disability benefits—a much-needed safety net that could very well last her whole career. Luckily for her, she planned early and wisely; we simply helped her maximize her benefits so she got the most of what she was paying for.
When you’re busy building your career, taking care of your kids, and managing life’s other responsibilities and joys, it’s easy to ignore the financial details that can significantly impact your life—especially when those details are only relevant in an emergency. That’s why it’s incredibly important to have someone in your corner who you trust. You shouldn’t have to keep up with the intricacies of your financial world on top of everything else you juggle. Even if you enjoy managing your finances, it’s helpful to have a second set of eyes—someone who regularly researches financial strategies, analyzes data, and stays up to date on insurance products. That way, when the unexpected happens, you have someone to guide you and help you make the most of your situation.
If you’re unsure about where you stand financially, always ask. At Parkes Financial, we’re here to help you maximize your opportunities, whether you’re in a time of crisis or hoping to pursue a new and ambitious goal.
Dave works with hundreds of Bay Area dentists, physicians and their families. He has a deep understanding of the financial needs of the medical/dental practitioner. He makes planning simple and clear by coordinating both business and personal finances for his clients.
He also works with Silicon Valley executives, professionals, and their families.