medium · Certified Financial Planner Risk Management
Marguerite Kovacs, aged 64 and single, has $3.1 million in investable assets and is considering self-insuring her long-term care risk. A professional planner identifies that while she can absorb the median cost of care, a 'tail risk' event like a seven-year cognitive impairment would be catastrophic.
What should the CFP® professional prioritize first?
- H3 - use available no-cost or employer benefits first: Verify if her existing life policy has an accelerated death benefit rider.
- competence and scope obligationscal assessment to determine the probability of dementia.
- quantitative optimization only after higher duties are mete internal rate of return on the policy premiums.
- H6 - address risk and cash-flow needs before seeking return: Liquidate her aggressive equity holdings to fund a $500,000 cash reserve.
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