Changing needs of insurance evolve, as your life changes
Changing needs of insurance evolve, as your life changes.
Life changes. Whether it be for the best, or the not so very best – things do happen. With that, you have to keep pace with your changing insurance needs. It is recommended you have an insurance review, at least every couple of years at minimum. The ideal is once a year, but you know life happens.
This article is not a sales piece. It is not intended for you to pick up the phone and call the nearest insurance agent. The purpose is to provide some discussion points, as well as ideas – so when you are ready I encourage to talk to your trusted professional. By all means if you don’t have one, or do not know who it is – don’t hesitate to reach out to myself. I’m happy to have a no- obligation conversation.
Some areas of discussion in this brief article we are going to discuss include the following:
1. New child
2. New purchase
4. Restructured or downsized
5. Leaving a legacy
New Child: Having a new child is an exciting time. Life’s greatest memories are those moments you make with your family. Cherish every moment of it. While it may not seem appropriate, it is important to have an insurance review once you are settled in. Why? It’s because you’re not just protecting your spouse or yourself – you are now protecting your child as well. If something where to happen to you, whether it be loss of life, or income due to an accident or illness – it will have significant implications to your finances and quality of family life.
Most of it can be prevented, by having a conversation and comparing what you do have, and what options are available to fill in any gaps for any coverages you don’t have.
New Purchase: From a personal perspective, one of your biggest purchases
you will make is your house. If we take a step back, why do people purchase a house? Is it for the quality of life and the many years of memories you will make? Or is it apart of a long term comprehensive plan, to pay dividends down the road.
Whatever your reason is, would it not make sense to ensure you are
adequately protected for this? I use the word ‘adequately’ as many people think “I’m protected… through my mortgage provider”. While this may be the case, it’s important to read the language within the contract provided by them, as it may shock you.
This is why it’s important to have a review with a licensed, qualified individual – in helping you understand what it means and how it works. Changes (if need be) can be made, before it’s too late.
Divorce/separation: While we celebrated from the above about having a new
child, divorce and separation are also a reality. It has been proven time over
time that the main causes of divorce/separation is money. Whether it be lots of it, or little of it money has been the main driver to this. When financial stress happens, the risk of this happens as well and the quality of family life is at risk.
When couples get divorced or separated a new leaf turns. The individuals now have to look at protecting themselves, any children living with them and their assets. Protecting your income would be in the form of your day to day income – if an accident or illness happens, how will this make matters worse?
Protecting you could be in the form of benefits. When divorce or separation happens are you able to keep your benefits (if you were relying on your spouse’s benefits)? Protecting your children would be in the form of properly structuring your portfolio, to leave a legacy for them. Protecting your assets would be to look at efficient vehicles, which meet your overall goals and objectives.
While it may be difficult, when couples are going through this it’s important to speak with a licensed professional to learn your options so there is no ‘sticker shock’ when you find out you were not covered (in the event something happens).
Lastly, don’t forget to update your beneficiaries! You will be surprised how many divorced/separated couples I meet who have their ex-spouse as primary beneficiary.
Restructured or downsized: Being restructured or downsized is a difficult time in one’s life. Here you’re identity within your profession is now being taken away. Take it as an opportunity, for bigger better things. Big decisions need to be made at this time, with in regards to your personal finances. Apart from budgeting your new lifestyle, one has to understand another big lost – the benefits.
Depending on the deal you negotiated (or your lawyer) – your benefits for you and your family may be terminating and you will want to have other options lined up real quickly. With those benefits being terminated, it also includes your company life insurance and disability insurance. Provisions exist within the group contract to convert the life insurance and disability without a medical (based off some qualifications) – but this has to be started within 30 days of losing your group coverage. If you wait until day 40, you lose that no-medical privilege.
Finally, group retirement investments (or a pension) will also have to be reviewed. The company will no longer fund these, so it’s important to seek out your licensed, qualified professional in helping you explore your options.
Leaving a legacy: Many individuals would rather leave a legacy for their children, grandchildren and loved ones and not the government. Fact of the matter is – many estates have accumulated large assets, and are not properly protected against this windfall for the government. While many people have intent on leaving an inter-generational gift (usually money) to their loved ones when they are gone – in achieving this may require insurance.
While many may not like to hear the word ‘insurance’, it can be a cost effective and powerful tool in achieving your legacy within a tax efficient matter. Having a conversation with your professional may be eye opening. In fact, when it comes to this discussion I bring in the professionals. Having access to tax and estate planning professionals, we work with you, your professional accountants and lawyers in helping you protect, build and leave a legacy.
Life does change. Is your insurance needs changing with it?
While this is for information purposes only, its purpose is to help you make an informed decision as to some of the areas that warrant a review when life changes. To learn more about any of these, or do have a discussion – don’t hesitate to reach out to your qualified, licensed professional. If you do not have one, or would like a second opinion – don’t hesitate to reach out!