Insurance Protection Isn’t For You
I’ve been in this business over a decade and I always remember an old quote about life insurance, “you get life insurance if there’s someone you love.” That’s relevant and true, because life insurance isn’t for yourself. In fact, you won’t be around to see a dime of it. It’s to protect those that you love, to help ease their burden once you’re gone, and to help provide for them if they need it. It’s so that you’re not leaving unfinished financial messes or debts from your estate as a liability for your loved ones to pay for.
And life insurance isn’t for when you have children either. It’s a good idea to get some insurance coverage long before that, especially if you’re building wealth, owning real estate, or have some personal debt that’s accumulated and is uninsured. Get insurance while you’re young and healthy. Having something is better than nothing should your health ever change and you become unable to be approved for life insurance. That way, if or when you do have children you’ve got something for them should a tragedy strike.
And tragedy can strike, when we least expect it, and by no fault of our own.
It’s not always tragic, or our fault
It’s those times that insurance really plays a key role. It’s when you’re a perfect driver and are in an accident caused by another. It’s when you’re healthy and suffer an injury making you unable to work for months or years, or ever again. It’s when by no doing of your own, you’re diagnosed with a physical or mental disease that could ultimately take your life.
Of course, not every insurance is for “the end”, but it’s all to protect your loved ones. If you’re unable to earn an income for a year, will that impact your ability to live your life and pay your bills? Likely you’d seek financial help from loved ones, or your partner would be forced to provide wholly for the family which may not be easy or possible.
When is enough enough?
This magic number comes up in financial planning all the time… how much insurance coverage do I need? This can be determined by a needs analysis, matched with the cost that you’re able to carry in your monthly cashflow. Sometimes we have to meet in the middle, but again, something is always better than nothing.
Insurance as a financial planning tool
While it’s my belief that every Canadian should have some form of life insurance if they do not have assets that would otherwise more than cover any financial burden to their estate, protection isn’t the only purpose of insurance. Life insurance can also be a valuable financial planning tool for people to amass wealth for their later years. Strategies can be built around your family investing in insurance as a form of long-term savings, albeit with an unexpected timeline. (Intrigued? Ask me for more information)
Insurance is only a singular and beginning part to any fulsome financial plan, but it’s a place to start putting the puzzle together.