Best Business Practices for Photographers [84]
Life Insurance: Get It While You're Young and Protect Your Family
One type of insurance that is most often associated with the elderly or people in their 40s or 50s is life insurance. Although this sentiment is commonplace, as you evolve from your 20s into your 30s, life insurance becomes much more of a necessity. While this (along with health insurance and disability insurance) might not be a business expense—unless you have employees and are offering it to them as well as yourself as an employee of the company—it is important that you include the expense as a part of your salary/benefits needs. Not only should you plan for the expense early, but the earlier you make the expense a part of your monthly personal financial obligations, the less expensive it will be each month. For example, through a combination of good fortune, healthy parents, and a nonsmoking/non-drinking lifestyle, my insurance company considered me a low risk, and for a six-figure life insurance policy, I pay less than $200 a month. As a husband with children, I have significant peace of mind that if the worst were to happen to me, my family would be able to pay the bills and complete their education. Further, my insurance plan includes a tax-deferred savings feature that can be used as a financial tool to assist the business or my family in the event of an emergency or as a retirement supplement.
There are numerous life insurers and types of life insurance. Because I am not an expert on them, I encourage you to seek out the professional advice of a life insurance agent who will help you make the best decision for you and your family. I would, however, encourage you to do a few things on this. The first is to contact an insurance agent who does not represent just one company, but rather multiple companies. Each company has different policy types, and although it may be convenient to use the same company that you use for your homeowner's insurance, auto insurance, or the like (and to obtain discounts associated with doing so), you should work with a professional who spends all of his or her time evaluating policies specific to individual needs. Perhaps, in the end, the benefit of buying a multiple-policy situation through your homeowner's/auto insurer might be the right choice, but you won't know that until you've evaluated your options with a professional.
The second suggestion I would make is to have this expense (with other critical expenses, such as mortgage or rent, health insurance, auto insurance, and so on) automatically deducted from your bank account. This ensures continuity of service and will be one less thing you have to remember to pay each month.
Disability Insurance: Think Again if You Believe You'll Never Get Hurt
When you're young, you're invincible. Maybe you don't wear seatbelts in the car, or you take risks that make many older people cringe. However, the odds of you making it to old age without a disability are not insignificant. The probability of disability between the ages of 30 and 60 is 28 percent, and the odds-makers on this issue are—you guessed it—the insurers. They have very experienced people—whose official title is actuary—who do nothing but analyze risks and determine the probability that when an individual exhibits certain sets of risks, he or she will call upon the financial reserves that the insurance company has.
Although it might be obvious to many that a smoker, skydiver, or other risk-taker has a higher probability