One of the reasons I founded Black Spruce Financial was to provide comprehensive financial planning for my clients. This means that I care about your entire financial picture, not just your investment accounts. In the same way a good doctor will ask about your diet and exercise habits and review your records before making a diagnosis, I strive to look at the entire picture.
A great investment portfolio means nothing if your financial plan doesn’t include protection against risks. Risk management through insurance is a critical part of a comprehensive financial plan. Without adequate insurance coverage, your financial future is not secure.
With the appropriate insurance tools, you can ensure that your assets are protected and your family or business has a secure future, even if the unexpected happens. As part of Black Spruce Financial’s wealth management services, I address the four key insurances that are an important part of your financial plan.
1. Life Insurance
Thankfully, this is the least commonly used insurance of the four, but the most regularly purchased due to its importance. Life insurance protects your dependents in the event of your death, so it’s crucial to carry life insurance if you have children or other dependents. Additionally, it’s wise to make a habit of updating your coverage based on your needs at least once per year.
As of 2013, only 43% of Canadian households owned individual life insurance, even though many families would be in dire straits without it if something tragic were to happen. (1) Life insurance policies should be purchased to take into account mortgages, non-mortgage debt, childcare, college savings, and more. Stay at home parents should also have coverage since they provide valuable work that would be costly to outsource in the event of their death. Business owners may have other insurance needs to protect the future of their business.
The next three insurance coverages are considered living benefits insurance. In other words, these policies serve as income replacement and health cost coverage tools to have in place in order to ensure that you and your family can reach your financial goals with as little financial disruption as possible while you are living.
2. Long-Term Disability Insurance
About one in four Canadians have had to take time off of work due to a disability, even though most people believe that disability is rare. (2) An accident, injury, or illness that keeps you from working can wreak havoc on your financial plans and set you back months or years. Common long term disabilities can even include neck, back, or joint disorders.
While many people believe they are covered by their employer’s long-term disability insurance, the coverage may be limited and inadequate. Coverage of up to 2 years is the typical limit with employer benefit long-term disability plans. The need for a private long-term disability coverage will pick up where employ long-term benefits fall short. Before your employer long-term benefit is activated, most employer’s short-term benefits will provide coverage for three to six months. Private long-term plans can be very costly and therefore tend to be a more practical option for higher paying income bracket careers such as executives and business owners.
3. Critical Illness Insurance
While no one wants to think about a life-changing illness entering their life, it happens more than you might think. Critical illness insurance pays a lump sum amount to help with the costs associated with the illness. This insurance is unique because there is flexibility with how you can allocate the funds. You can use it to replace income for you and your spouse while you are dealing with the illness or it can provide for alternative medical treatments not covered by government health insurance. If you don’t want to be worrying about money while dealing with a serious illness, consider critical illness insurance for peace of mind.
4. Long-Term Care Insurance
If you are nearing age 65, it may be a gamble to go without long-term care insurance. It may surprise you, but long-term care is not covered by Canada’s public healthcare system. According to a study conducted on behalf of the Canadian Health and Life Insurance Association, 74% of Canadians do not have a plan to pay for long-term care (3), and 52% would not be able to afford long-term care if they were to need it right away. (4)
Long-term care insurance covers the cost of services for a variety of tasks you may need help with as you age. Today’s long-term care policies offer more flexibility and benefits than ever before. It is important to understand the long-term care insurance options available to you and whether or not a policy is appropriate for your lifestyle and needs. While some policies can be expensive, requiring long-term care without insurance in place can be financially devastating.
Have you reviewed your insurance coverage within the last twelve months? If not, you may benefit from a comprehensive review to protect your family and your financial future. I am here to help evaluate your insurance needs. Contact me at 416-553-5004 or gino@blacksprucefinancial.com.
About Gino
Gino Scialdone is a financial advisor and the owner of Black Spruce Financial, an independent wealth management firm serving independent business owners. Having grown up in a family business and owning a business himself, Gino has a unique understanding of the challenges and needs business owners face. Offering a comprehensive array of wealth management and financial planning services, he strives to provide sound and creative strategies that meet a business owner’s short and long-term needs. Based in Toronto, Gino serves clients throughout the greater Toronto area and southern Ontario. To learn more, connect with him on LinkedIn or visit www.blacksprucefinancial.com.
_____
(1) http://www.investmentexecutive.com/-/fewer-canadians-buying-life-insurance-but-the-need-remains
(2) http://www.rbc.com/newsroom/news/2014/20140923-ins-disability.html
(3)https://www.clhia.ca/domino/html/clhia/CLHIA_LP4W_LND_Webstation.nsf/resources/Consumer+Brochures/$file/Brochure_Guide_Long_Term_Care_ENG.pdf
(4)https://www.sunlife.ca/ca/Learn+and+Plan/Money/Insuring+your+health/Five+things+to+know+about+long+term+care+insurance?vgnLocale=en_CA