Explaining K-Co Risk Requirements
This article is intended to educate you on how K-Co defines risk, why we intend to mitigate scarcity-risk, and how the K-Co risk mitigation policy benefits your personal economic wellness journey and reinforces sustainability for K-Co and its environment.
What is risk?
K-Co defines risk as degree of uncertainty and/or potential financial loss from unexpected events.
Risk-mitigation is fundamental for reducing the chance that your investments, savings, or overall financial well-being could be negatively impacted. Your safety is a priority to K-Co and we prioritize prevention vs treatment.
How does personal long-term disability insurance mitigate risk?
Your greatest asset is the ability to produce an income, and personal Long-Term Disability (LTD) is how we protect your income from capital-scarcity risk.
Personal LTD verifies your income and insures a portion of your earned income. Personal LTD is paid with after-tax dollars, and in the event you need to use your benefits, your insured income will be paid to you, tax free.
Typically if you are an employee, your employer-sponsored LTD covers 60% of your income. If you decide to leave your job, your employer-sponsored LTD is not transferrable. Additionally, in the event you need to use your employer-sponsored LTD, and your employer uses your pre-tax dollars to cover the cost of the benefit, your insured-income will be taxed, meaning you will be paid out around 40% of your income.
If your employer covers 60% of your income, typically a private insurance carrier will cover the additional 40%, bridging the gap in your income-protection coverage to ~100%.
Income-protection strategies such as personal LTD mitigates capital-scarcity risk by ensuring if you are unable to produce and income due to a health-related concern, you will still be producing an income to cover capital needs to grow your wealth and retain membership with K-Co.
How does life insurance mitigate risk?
Life insurance is a tool to preserve your current and future wealth. We leverage the components of permanent life insurance, the accumulated-cash value & the death benefit, to preserve your current financial accomplishments and protect your life-time net worth.
The accumulated-cash value preserves your current wealth and reduces the risk of owning cash in a bank account. When you transfer your cash to an asset that’s wealth-preserving, your cash becomes the principal of an asset, and that asset creates flexibility, generates leveraging power, and reduces inflation and investment-risk on the principle utilized.
Generational wealth is a key goal for our Private Wealth Network. Over the test of time, permanent life insurance is a proven tool to positively impact financial positions for your family while you are alive and for your family’s generations to come.
K-Co see’s the important of life insurance to a wealth strategy and requires a minimum coverage for all members.