- Follow-up and Reviews: Follow-Up is essential to evaluate results and determine if these results have met expectations. If the plan fails to meet objectives, it must be reformulated. Reviews are also necessary, especially if changes in customers’ assets or family situation arise. The financial plan must also adjust to the needs of each individual. There are six essential elements in the financial plan.
- Risk Management: This phase consists in identifying and quantifying tolerance to volatility and risks within the family structure. One of the essential risk management tools is life insurance, because it mitigates the financial impact resulting from the death of a family member.
- Establishing a Savings and Investment Program: Each individual has specific reasons and circumstances for investing. However, education plans , retirement plans and other investments such as Time CDs, Stocks and Bonds are common means to achieve financial goals.
- Retirement Savings: Today, an individual can have a retirement plan from various sources: government, private, savings and personal investments.
- Tax reduction: Taxes should be taken into account when creating a financial plan. When it comes to taxation, most people think of income taxes. However, other taxes can be just as important, for example, inheritance/estate taxes, in case of a death.
- Establishing an Estate Succession Process: An orderly, efficient transfer of an estate to its beneficiaries needs to adhere to the objectives established by the owner of the assets, and can be accomplished through the use of an estate transfer plan.
- Family Cash Flow Management: This element is at the base of any strategy, since it entails creating a regular budget and an expense structure, along with a system that enables income and expense follow-up. A life insurance policy can directly or indirectly help the family’s cash flow management process, by modifying premiums or loans through policies that cover specific needs.