Insurance, not one size fits all.

Insurance is like a pair of shoes… one size does not fit all but there is that perfect pair for everyone. The comparison might sound silly, but think about it… shoes are used to protect our feet while providing support and style. Well.. insurance is a means of protecting our families, assets and well-being while also ensuring the luxuries we rely on are available during times of hardship. Knowing you have a good insurance policy in place will make you feel as confident and prepared as putting on that new pair of pumps! You will exude confidence in knowing your affairs are in order and your family is protected.

I personally am a shoe-a-holic! I am the girl who sneaks in a new pair frequently enough that my husband had to build an entire shoe wall in my closet. Now, I wasn’t always excited about insurance and I didn’t really understand why a woman in her 20s would need a plan like this. I am healthy, far from needing death insurance or estate planning. However, I am a financial advisor, I discussed this need and topic on a daily basis with many people of all ages. I didn’t understand fully until a few years ago when I got married, bought a house owing a large mortgage, and most crucial - my daughter was born. It amazes me how the mind shifts when a woman finds out she is pregnant. I believe it was the moment I saw the plus sign on the pregnancy test that I realized and began to understand how important insurance really is. I now have a combined amount of debt that would only lead us into bankruptcy if we had no income; if something happened to me, whether that be illness, injury or death I would leave behind a significant financial burden. Now, I have the luxury of owning corporate health benefits which are wonderful, but not enough when assuming the worst case scenario. While two times salary sounds great at this moment, think about that in the long run and how quickly that money would be depleted in a time of need. I know in my case, two times salary would not sustain my daughter's standard of living and send her to post secondary school – never mind provide peace of mind to my family while experiencing death of a family member. I know you may be thinking that the goal of insurance is not to get rich, but let me remind you that money will never hurt in a time of need when all you can think about is “what am I going to do now?” Maintaining the same standard of living and peace of mind is on most people’s list of objectives when planning for the future.

Let me give you an example. For argument sake let’s say you or your spouse make $100,000 annually. After tax that works out to approximately $60,000 – to make things simple. Whether you are sick or injured and unable to perform the duties of your job resulting in no pay or less pay, or your spouse passes away from illness or an accident, that is a HUGE loss of income. $60,000 a year for 2 years is $120,000 lost … $60,000 a year for 5 years is $300,000 lost … $60,000 a year for 10 years totals $600,000 lost. You get the idea. In my case this became very scary, without a backup plan our options would be slim if by chance we do end up suffering through financial hardship.

The solution was simple, buy more and the appropriate insurance coverage to satisfy our objectives. We now have tax free income replacement, a large tax free sum to pay off the mortgage (if we choose to) and a tax free lump sum in the event of illness diagnosis. Phew, do I feel better knowing that we are secure! Of course I celebrated this defeat by strutting around in a new pair of gladiator stilettos ;)

Happy shopping!