Fall 2020 Newsletter
When developing a financial plan, it is common for Canadians to focus on retirement savings, income strategies and tax minimization. These are critical elements that we discuss with our clients to ensure they can live comfortably now and into retirement.
Nevertheless, to build a comprehensive wealth solution, it is imperative to consider managing risk as well. Risk is life’s uncertainties. We all like to think that nothing will happen to us but there is always a level of risk in life. If you are faced with an unexpected life situation, it can have devastating consequences to your finances and ability to support your loved ones.
This is why risk needs to be addressed as part of your financial plan so we can work together on lessening the financial impact if something were to happen.
What if you are injured and it impedes your ability to perform your job?
What if you are faced with a serious health issue, which forces you to leave your job for an undetermined amount of time?
What if you are no longer providing income to your family?
What if you were suddenly gone tomorrow?
These are unsettling scenarios and these types of risks need to be appropriately managed for your peace of mind. This is why our team at ClearRock Financial is committed to helping you prepare for the unexpected. We do this through various types of insurance solutions that are customized to fit your lifestyle and protect your financial future.
We are excited to have Julie spearheading the risk management portion of your financial plan to make sure you are well covered and have a good understanding of your insurance needs.
Reviewing Appropriate Risk Coverage
Most people have not taken enough time to think about their insurance needs. Perhaps they have no insurance or maybe they are underinsured. Risk management tends to sit lower on the priority list when planning because it focuses on “unlikely” events. However, when a loved one is ill or passes away, you do not want to be thinking about how you and your family are going to meet financial obligations. You want to be able to take bereavement time, or care for the sick individual. You will be focusing on tending to household and family duties. Having a proper plan is an invaluable gift given to the entire family during a distressing time. Also, keep in mind that insurance is not just for the “breadwinners.” Other contributors to the family like stay-at-home parents provide great value. If they were no longer able to perform their daily tasks that would be a huge expense for other family members to take on. Especially at an emotionally difficult time. You should be able to say the following with confidence if your insurance needs are met:
If something happened to me, my family would be financially comfortable.
I have considered all insurance solutions based on my needs and budget.
I hope for the best, but I am prepared for the unexpected.
My family will be left with a protective legacy.
Managing Risk
Similar to how we review The Crystallization Process with you, we have a process to review your risk management as well. We will uncover potential risks that could affect you and review how to best mitigate your risk. Answers to questions like these will help us develop your risk management plan: is your family reliant on one person’s income? Is there a history of disease or other health related issues in your family? Is staying in your home a priority if your partner were to pass away? How will you pay for healthcare costs? How much money
do you want to leave to your children and/ or partner?
Using Insurance to Manage Risk
There are several types of insurance coverages to protect you when unforeseen circumstances arise. Here is a brief overview. Life insurance pays a cash benefit, tax free, to your beneficiaries when you pass away.
Life insurance can be Term, Permanent or Universal Life, depending on your individual needs.
Disability insurance replaces a portion of your income if you are unable to work. Critical illness insurance pays a lump sum to the insured person if diagnosed with a serious illness (cancer, heart attack, and stroke being the most common), and survives 30 days from diagnosis.
Personal health insurance helps to cover portions of medical, dental and other expenses not covered or partially covered by your provincial or employer plan.
Long-term care insurance helps to cover the costs of your care over a potentially lengthy period of time associated with independent or assisted living, and/or fulltime care if you are unable to preform 2 Activities of Daily Living.
You never know what tomorrow will bring but you have control over what contingencies you put in place. Take control of your family’s future. We look forward to discussing risk management during our next meeting with you. If you would like to speak to our team now, please contact us.