Insurance & Risk Management

Insurance and risk management go hand in hand, and it’s advantageous to find a financial planner capable of assisting you with both.

Insurance and risk management are both centered on the same concept: protecting you. Insurance can cover everything from health issues to end of life expenses. Risk management, on the other hand, focuses on providing you with financial security. Just as insurance can protect you and your loved ones from suffering financial losses due to physical health problems, risk management protects against financial risks to yourself and your property. Monetary losses can be unavoidable at times, but taking steps to secure your finances can offset some, or even most, of what you might lose.

Q: What Exactly Does Risk Management Involve?

A: Managing the risks you face is an important aspect of financial planning. Putting together a strategy for growing your finances is pointless if you don’t take the right steps to protect them. There is no telling when something might go wrong, and it’s important to be ready. For example, your personal finances could take a big hit if your assets suffer damage or if your investments take a turn for the worse. Loss of salary from an inability to work is also a risk, especially if you have regular expenses that require a steady stream of income to pay.

Risk management involves taking steps to make your finances more secure by using strategies and tools that can help protect you from financial losses. A thorough risk management plan will cover you and your property as well as cases where you might be liable for damages. Even if you don’t believe you’re likely to need this kind of protection, it is much better to have it and not need to use it than to risk proceeding without it.

Q: What Types of Insurance Should I Consider?

A: Health insurance is important for obvious reasons — your health and well-being should be a top priority, and having health coverage is a good way to stay in good (and working) shape. As for the other options at your disposal, they will depend on the level of protection you desire:

  • Life insurance- should be a critical part of your financial plan. It can come in two forms: 1) permanent insurance, which remains in effect for your entire lifetime (assuming you keep up with your payments), and 2) term life insurance, which covers you for a specific time frame, and is more common for younger people who are trying to pay off debts while also saving for the future. The best choice for you will depend on the nature of your needs.
  • Long-term care insurance- can provide protection for your loved ones in the event of you needing assistance with things like basic mobility, or if you suffer from mental impairments. Investing in long-term care will remove some of the financial and emotional burdens from your family if you end up requiring this kind of help.
  • Disability insurance- can provide short-term insurance benefits in the event of a loss of wages due to an illness or injury that deems you incapable of working. Investing in this type of insurance can help you provide for yourself and your loved ones in the event of an unforeseen disability.
  • Medicare supplement insurance- also referred to as a Medigap insurance policy, this type of insurance can help you pay some health care costs that are not typically covered by traditional Medicare. This may include copays, coinsurance, and deductibles.

Q: Is Insurance a Form of Risk Management?

A: Risk avoidance is an important part of risk management. While there will always be hazards you can’t avoid, there are also those you can take steps to prevent. Living a healthy life, avoiding reckless behavior and taking the right safety precautions can go a long way toward reducing the risks you face. This can all contribute to a better quality of life as well.

On the other hand, for the risks you can’t prevent on your own, insurance is a popular and effective strategy for managing financial risks. Insurance may offset unexpected financial losses, but when it comes to the type of policies you should get, talking to a professional is the best course of action.

If you’re sure you want to invest in minimizing your financial risks but you’re not sure about how to proceed, Cornerstone Financial Management, LLC is here to help. For more information about insurance and risk management, and how it can protect you and your finances well into the future, contact us online or give us a call at (803) 462 4396 today.

*This information contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. Guarantees are based on the claims paying ability of the issuing company.


Financial freedom begins with a recognition. It is then followed by a decision to leave where you are in pursuit of where you want to be.

Bob Deaton, CFP, CMFC

It isn’t how much money I’m making that will determine my financial success. Rather it is how much I’m keeping and how hard it is working for me.

Jay Brown

If we are planning for our future, we have to begin with the present. If we don’t identify our starting point, we will not have a direction to walk towards.

Ken Calcutt, CMFC

In the pursuit of our financial goals, we must be willing to adjust our strategies.

Robert Templeton, CKA, CRPS, CMFC