In football, we all love watching the big play. Long passes, acrobatic catches and punishing runs make for great entertainment. A high scoring offense can mean championships for the team, but as most diligent coaches and General Managers know, a good offense needs solid protection.

Assets Require Protection, and Quarterbacks Are No Different

It really doesn't matter who plays quarterback if no one blocks the defense.

NFL teams view their quarterback as an asset and seek immediate protection in the form of a talented offensive tackle. While offensive tackles provide run and pass blocking, they also protect the quarterback from devastating hits that could ruin a play, or even worse, an injury.  

NFL organizations know that valuable assets need protection, and they pay handsomely for it. In fact, despite not being particularly fun or exciting to watch, offensive tackles are the third highest paid position in football.

This is probably a hard trade-off for owners and general managers. When given the option of acquiring a wide receiver that will score touchdowns and sell jerseys, or paying someone to block, the smarter owners understand the difference between short-term gain and long-term success.

Insurance and Estate Planning – The Offensive Tackle of Your Financial Plan

A well-structured financial plan is no different in that individuals must choose to pay for protection of their valuable assets and income streams. This sometimes isn’t the most satisfying short-term choice, but it's necessary.

As football fans mostly discuss the importance of touchdowns and sacks, most individuals primarily focus on investment returns and market circumstances when discussing financial issues.

Strangely enough, while investments get the most airtime and anxiety, they're actually the area of financial planning that should command the least amount of attention. As I've said in a previous article, investors might be better served to adopt a market agnostic strategy and focusing on other things that are in their control and that they can affect.

Although not as sexy, discussions about contingency planning (insurance and estate planning) should receive more focus, both due to the downside of ignoring these areas, and the material benefits that can manifest from addressing them.

The conversations about contingency planning pale in comparison to those about the markets. Issues such as long-term care or life insurance, estate planning or property and casualty insurance could have an enormous effect on a family's finances, but yield groans when brought up in a client meeting.

Understanding the Link Between Cost and Risk Management for Contingencies

Key areas and pertinent questions:

• Estate Planning.   If I pass away, what happens to my minor children? Who receives my assets?  Who makes healthcare decisions for me if I’m unable to do so?
• Life Insurance.  How will my family meet their financial goals if I pass away?
• Personal Insurance.  What happens if I’m sued and found liable? Do I lose my house?
• Long-Term Care.  How will I pay for care if my spouse or I can no longer complete functions of daily living like bathing, getting dressed or eating? 

Generally, when the conversation turns to insurance or estate planning topics, the clients want to know one thing: "How much does it cost?"

Part of the challenge lies in the subject matter of these conversations. Why talk about death and disability when we could talk about compounding investment returns or vacation homes? Also, the insurance industry hasn't historically had the best reputation with consumers.

As a practitioner helping mostly younger working families, I can sense the skepticism around insurance.

There have been a lot of products pushed over the years, and some of them haven't worked out so well. At the very least, individuals should have a clear understanding of coverage needs, costs, benefits, and alternative coverage options. Proper analysis by a capable fiduciary advisor should dispel any skepticism.

For older Americans, the discussion of long-term care insurance evokes associations with rising premiums, questions about ever needing the benefit, and—let's face it—nursing homes. But the only thing worse than nursing homes is not being able to afford one in a time of need.

And the blitz from an NFL defense won't compare to a pack of personal injury lawyers filing suit when an injury occurs on your property and umbrella coverage hasn't been reviewed in fifteen years.

These are difficult but necessary conversations. Without the right safeguards in place, there is nearly no level of savings, budgeting, or investment planning that can provide the financial safety net and peace of mind through proper insurance and estate planning.

When you've worked hard enough to earn something worth protecting, there is no point in unnecessary exposure or risk.

Ultimately we need insurance and estate planning, and failing to add these pieces to a financial plan is asking for trouble.

It really doesn't matter who is throwing and catching on the football field if no one can block. And it really doesn't matter how well you've saved or invested if your assets aren't protected. Protection isn’t free, but many times it's worth every penny.

If you have concerns about any of these issues, schedule a meeting with Claro Advisors today.

Disclosure: Claro Advisors, LLC ("Claro") is a registered investment advisor with the U.S. Securities and Exchange Commission ("SEC"). The information contained herein is for educational purposes only and is not to be considered investment advice. Claro provides individualized advice only after obtaining all necessary background information from a client. Information contained herein is taken from sources believed to be reliable, but cannot be guaranteed as to its accuracy. It is for informational and planning purposes. Nothing herein shall be construed as an offer or solicitation to buy or sell any securities. Nor is it legal or accounting advice. Investing carries risks and expenses and involves the potential loss of investment. Past results are not indicative of future results.