Insurance Planning

Overview

Risk Protection

Insurance planning deals with three of life’s serious risks:

• Living longer than expected
• Dying prematurely
• Becoming disabled or suffering a serious illness

Your income (the money you earn), provides the foundation for everything you do; from paying the mortgage to feeding and clothing your family and everything else in between.

Money for final expenses, debt repayments, business continuation, and other monthly essentials is there when you need it most. But have you protected the people who depend on you from any unforeseen circumstances? Even substantial assets can be wiped out quickly.

• A medical emergency can result in an early death, leaving your family without adequate income.
• A long-term illness can quickly drain a lifetime of savings.
• An injury or accident can make returning to work impossible.
  

Your financial plan is designed to ensure that you’ve planned for the future life you want to live. An essential part of your financial planning is to make sure that your family and assets are adequately financially protected if something unexpected did happen to you. Investing in insurance is about investing in peace of mind. We will assist you to determine what types of insurance will best suit your personal circumstances.

Life Insurance

Is protecting the people you love and who are dependent upon you. It is the best way to create a safety net to preserve your family’s lifestyle, dreams and aspirations in the event of death, disability or illness. Combined with investments, retirement and estate planning, life insurance is a fundamental part of a sound financial plan.
Life insurance is a common component of estate plans. It can provide tax-free cash when it is needed the most. A good life insurance program does more than just replace the loss of income when you die. It should also provide money to cover the new costs that arise after your death. Life Insurance can provide an income-tax-free, lump sum payment that can be used to settle debts, or be invested to provide a monthly income stream for your family. It also can be used to:

• Provide the cash to pay for funeral and last expenses
• Provide the capital to create a trust for loved ones
• Provide cash as an inheritance
• Provide cash for children’s education
• Provide a donation to a charity
• Provide cash to pay the tax liability on a RRSP, or RRIF upon the last death
  
• Provide cash to pay the tax liability on investments
  

Lack of sufficient life insurance coverage when a loved one dies can have devastating consequences for a family that can last for years.

The following articles have been assembled to clarify the differences between the various insurance products that are available and help you to determine which product may be right for you and your needs:

While everyone’s needs are different, it’s important to have a good risk protection strategy in place.

Ask yourself the following:

• Do you need life insurance?
• Is your income protected?
• Do you have Business Overheads protection?
• Do you have Crisis or Trauma Cover?
  
• Do you have your retirement health covered?
  

There are 3 approaches to calculating your life insurance need:

1. Human Life Value approach
2. Capital Need Analysis approach
3. "Rule of Thumb" approach

An example of each:

Human Life Value: You are 35 years of age, and you have 30 year until your planned retirement at age 65. If your current salary is $100,000 per year, upon your death, your family would "lose": (30 x 100,000) = $3 million

Capital Need Analysis:

Imagine the same example as above except the idea is to itemize important expenditures, and provide them upon death of policyholder:

• How much monthly income for spouse?
• How much for children’s' college education?
• How much for outstanding liabilities?
• How much for contingencies/emergencies?
...One would then add these items to arrive at a total insurance need.

"Rule of Thumb:"

This method is simple - it has been observed in practice that approximately ten times the policyholder's annual income is sufficient to provide for the needs of the beneficiaries.

Do you need life insurance or disability insurance?

If there is someone who would suffer economic hardship if you died or became disabled, then you need insurance. We can analyze your current financial position to determine your optimal level of life and disability insurance

Concepts

• The most common types of Insurance
• Different Types of life Insurance and their uses
• Buy Term and Invest the Difference
• When Is Term Insurance a good choice?
• What flexibility can universal insurance offer me?

Strategies

• How can I insure my future?
• How much life insurance should I have?
• What type of insurance should I have?
• Creditor Protection

Tools

• Home Insurance
• Mortgage Insurance
• Life Insurance