Insurance Planning

Risk Management
We risk death, disability, and illness everyday of our lives. We never know when fire, theft, vandalism, illness or other forms of despair will touch our lives. Our losses can be emotional, psychological, or financial and can range from minor to catastrophic. We can never totally remove the risks, but we can reduce their impact on our financial well being and on those we love by carefully preparing a risk management plan. Risk management primarily deals with:

Risk of Death: The risk of financial loss through death is essentially the risk of the loss of the income of the “bread winner(s)” of the family. Life Insurance provides a way of managing the risk of death.

Risk of Disability: The risk of disability is much higher than the risk of death. The disability on an income earner results in the partial or total loss of this income for the duration of the disability. Not only does a disability decrease or eliminate income, it can also cause an increase in expense. For example the family may incur the additional cost of paying for attendant care, medication, and equipment not completely covered by provincial health plans. Disability Insurance provides for covering this risk.

Risk of Health & Long Term Care: Long-term care insurance is a recent innovation, prompted by the enormous costs that can be associated with the health care needs of the aged. With the increase in life expectancy and improved medical care, people are living longer. Recent statistics have suggested that 225,000 Canadians turn 65 each year. The financial obligations of caring for yourselves or an elderly parent over a long term can wipe out an individual’s life savings, impoverish the patient’s spouse, and impose hardships on one’s family. Even worse, the appropriate professional care may not be affordable.

Risk of Critical Illness: According to recent statistics, Canadians are 10 times more likely to be unable to work due to a critical illness than die before the age of 65. This growing concern has led a number of insurance companies to offer separate coverage for Critical Care Insurance. The main benefit of having Critical Illness Insurance is that when a critical illness is diagnosed which is covered for under the policy, the insured receives a lump sum to use whichever way he sees fit. This coverage essentially provides a cushion for the consumer, which fills the gap between government and group disability insurance. Another advantage is that it is available to those who are self-employed, and to those who may not meet the requirements for Disability insurance.

The trick to managing the insurance continuum is to be covered today for what's important today, and to have an eye on what may be important tomorrow. Make insurance work for you, and not the other way around. 

The information contained in this commentary is designed to provide you with general information only, and is not intended to be comprehensive advice applicable to the circumstances of any individual. We strongly urge you to seek professional assistance before acting upon information included herein.