Asset protection

 Asset protection is a part of financial planning that helps you keep your assets safe from creditors. Various investment accounts, such as Individual Retirement Accounts (IRAs), have a certain amount of asset protection in favor of equity.

Ways to protect your assets from lawsuits and creditors

There are Six ways to protect your assets from lawsuits and creditors

1. Insurance against potentially large losses – Buy insurance for large financial risks that could reduce your savings or future earnings.

2. Consider Life Insurance – If you have dependents who would suffer financially if you die, buy life insurance. Another good candidate for life insurance is a young person with no dependents whose parents cosigned private student loans that are not forgiven in the event of death.

3. Real and Personal Property Protection – Purchase property insurance with a replacement cost rider on personal property to replace items at the current cost up to the policy limit.

4. Build Relationships – Build an ongoing relationship with one or more insurance professionals who can provide a periodic review of coverage and information about available cost-saving options.
5. Avoiding Coverage Gaps – Maintain coverage between jobs (for example, after leaving active military service) to avoid the risk of out-of-pocket costs.
6. Lower Insurance Costs – Consider using one or more of the following strategies to lower the cost of insurance premiums:

• Choose higher deductibles for auto and health insurance.
•  Compare at least three competing insurance companies before purchasing insurance.
•  Inquire about discounts available on the policy, such as good driver and non-smoker discounts.
•  Pay premiums annually instead of monthly or quarterly, or set up automatic payments.
•  Buy multiple insurance policies from the same insurance company (also known as “bundling”)
• Opt for longer exclusion periods for disability and long-term care.

Why protect assets is important for us?