By Douglas Goldstein, CFP®

When I prepare financial plans for clients, I direct them to their insurance agent to gather information about their various pension plans and insurance policies. Insurance is an important part of any financial plan, both for protecting your current assets and for providing retirement income. Frequently, clients find this an eye-opening assignment as they complete an easy-to-understand chart for each of their different policies (the free chart can be downloaded at the “Financial Planning” tab of www.profile-financial.com). If you have various policies from different jobs along your career path, it’s important to make sure that they all work together.

For instance, parents of young children might want a greater percentage of their bituach minahalim plan to go toward life insurance, while those with grown children might not need such a large policy, and wish to increase the savings component of their plan.

Does your pension plan have a spousal benefit? Though this perk might lower your monthly payouts, if your spouse has genes for a long life, over time it might mean greater income for your family. If you consider that one of the biggest causes of widow poverty is caused by the loss of the pension when the spouse passes, procuring a spousal rider on your pension policy may be a tremendous boon to a surviving spouse.

Do you have supplementary insurance to your kupat cholim? Being able to choose your specialist and the type of care you want can be costly. If you require further assistance than your health plan is willing to provide, owning a policy can more than pay for itself.

Is your disability policy up to date? When your salary increased, did you follow through with your insurance agent to make sure that your disability coverage increased proportionately? Often, independent workers (atzmai’im) have coverage that does not match their income. If you are in this category, check every year with your insurance agent to make sure that your policy is in line with your needs. Most workers are statistically more likely to become disabled than to die, so having proper disability insurance is at least as important as life insurance.

Understanding all of your investments, including insurance, is the first step of financial planning.