Many people don’t think about insurance as an “investment”, but in a way it is.  It’s an investment in your legacy – a means of enhancing the value of your estate. It’s an investment in preserving and protecting your family’s finances, lifestyle and perhaps, your business, come what may. It’s an investment in your quality of life – ensuring your medical and physical needs are met should your health suffer.

When you look at insurance from this perspective, two rules immediately leap to mind:

1.       Insurance must be an integral part of your overall financial plan and be firmly targeted on achieving your life goals as they are today and as they will be tomorrow.

2.       Insurance must be treated like any other long-term decision. Your financial planner has always told you that the ideal investment portfolio for you should encompass a variety of assets that are properly diversified to reduce risk and enhance long-term performance.  Similarly, your insurance portfolio should be broad enough to cover all potential risks. It should be diversified at the product level to cover all the risks you may possibly encounter and it should be aimed at achieving long-term performance in such areas as estate enhancement/preservation, tax planning, and even boosting your retirement income.

Here is an explanation of some of the most important insurance decisions you can make:

·               Life Insurance can be used to cover personal debt obligations or offset estate expenses when you die.  It can also be used to provide an income stream for your surviving spouse or to achieve other goals like a post-secondary education for your children.

·               Living Benefits Insurance is a category of insurance that provides benefits while you are alive instead of to a beneficiary after your death. It can provide vital financial support if you become unable to earn an income or are faced with escalating costs because of a medical condition. Types of insurance products that fall into the “Living Benefits” category include:

                                                               i.      Disability Insurance pays out a monthly income during a disability – a vital source of funds to offset such ongoing costs as mortgage or car payments if a disability or permanent injury prevents you from working.

                                                             ii.      Critical Illness Insurance pays out a lump sum of money after the diagnosis of a specified life-altering illness such as cancer, heart attack or stroke.  You can usually use the money any way you wish.

                                                            iii.      Long-Term Care Insurance pays out monthly benefits to use at your discretion (usually for, but not restricted to, health care expenses at home or in a nursing home). 

                                                           iv.      Supplemental Health Insurance reimburses money paid for health care and dental expenses not covered by a provincial and/or employer group health plan. 

·               Mortgage Insurance pays directly to the lender the balance remaining on a mortgage upon death.  An alternative is to obtain an individual life insurance policy. Your named beneficiary can use the tax-free proceeds as they wish – to pay off some or all of the mortgage or take care of other pressing expenses.

What do you want from your insurance coverage?  A licensed insurance consultant can help you find the right insurance solutions for your unique situation – solutions that deliver the diversity you need for maximum financial strength; solutions that fit your overall financial plan and your life objectives for today and tomorrow.

This column, written and published by Investors Group Financial Services Inc., is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your Investors Group Consultant.  Insurance products and services distributed in Quebec by Les Services Investors Limitée (a financial services firm), and elsewhere in Canada by I.G. Insurance Services Limited (insurance license sponsored by The Great-West Life Assurance Company).