Managing Your Money

If you’re unable to provide for your family, who will?

Someone once said that time is merely a device to keep everything from happening at once.  But, when you’re juggling a job, countless household duties and the demands of raising a young family, it often seems as though everything is happening at once. 

Your family depends on you in so many ways – for love and emotional support, of course, and for the money you earn to keep a roof over their head, put food on the table and maintain a comfortable lifestyle.  In your busy life there probably isn’t much time to stop and reflect – but, here are a couple of important questions you should ask yourself right now:  “What would happen to my family if I’m no longer able to support them?  If I became disabled, critically ill or die, will my family have the financial resources to stay in their home and continue enjoying the quality of life I’ve worked so hard to attain?”

There’s a simple answer to these questions: insurance – but the types of insurance you need depend on your circumstances and what you can afford.

Life Insurance can be used to cover debt obligations, including your mortgage, to achieve other goals like a post-secondary education for your kids, to pay your final expenses, or to provide an income stream for your surviving spouse.  Even a stay-at-home parent with no outside income needs life insurance – because replacing your care with professional childcare and domestic help will be costly.

The general rule is to maintain life insurance coverage equal to ten times your income.  It’s always best to complete a thorough needs/estate analysis to determine precisely how much money your family will need in your absence.

Disability Insurance is an important consideration because ‘life’ expenses like mortgage or vehicle payments don’t stop if a disability or permanent injury prevents you from working.  And it can happen:  U. S. figures show 48 percent of all mortgage foreclosures are caused by a disability-induced loss of earning power.*

You may be eligible to receive benefits from an employer-sponsored plan, but these are usually limited and sometimes taxable.  Government disability payments from the Canada/Quebec Pension plan may provide minimal monthly assistance, but the waiting period before receiving benefits can be financially devastating.  On the other hand, disability insurance benefits typically kick in immediately (or soon after a disability occurs) and can be tax-free.

Critical Illness Insurance can be vital to your financial health in the event of a critical illness or condition that has long-term consequences.  While disability insurance can help you meet day-to-day living expenses, critical illness insurance will help pay the additional costs associated with terminal or life threatening conditions like cancer, heart attack, stroke or multiple sclerosis.  This type of insurance usually pays a sum of money if you contract a specified illness that you can use in any way you wish – to pay out-of-country medical expenses, for treatment or prescription drugs, to subsidize your income or even to pay off your mortgage, business or personal loans.

The right kinds of insurance can provide a complete financial safety net for you and your family no matter what kind of curves life throws at you.  A licenced insurance consultant can help you find insurance solutions tailored to your personal needs and overall financial plan.

*U.S. Housing and Home Finance Agency

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 through I.G. Insurance Services Inc.  Insurance license sponsored by The Great West Life Assurance Company.

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