John Barabe and Madison Schenher understand that everyone's financial situation is unique and that managing your wealth can be complex and time-consuming. They have has an unwavering commitment to quality and service which has enabled John to build and retain a successful practice in Regina. The team of Regina financial advisors and support staff believe that planning with honesty and integrity are cornerstones to improving their clients' quality of life. They apply their knowledge to help clients make the right choices when considering all the product and service options that exist in today's marketplace. In their latest Regina financial advisors expert article, John and Madison help you make sense of insurance.
To simplify what coverage is most important, I will divide the coverage types into two main categories: Financial Inconvenience, and Financial Disaster. Financial Inconvenience coverage you can live without. It does not make this coverage bad, just not devastating to your loved ones. Financial Disaster insurance is of far greater importance.
Financial Inconvenience Insurance
What is financial inconvenience insurance? Examples include $300 Coverage for a new pair of glasses and an extended warranty on a toaster oven. Neither of these would wipe out the household if they had to be paid for directly. Even larger appliances or cell phones could fall under this category. The loss might be hundreds of dollars to fix an item, or even a couple thousand. Definitely put a pinch on the household for a few months, but this reflects the importance and purpose of an emergency fund.
If not for liability coverage, a package policy on your car would fall under this category. Taking your deductible down from $700 to $200 saves you $500. This is the financial inconvenience part. Liability coverage on the same policy can be a million dollars or more. This falls into the financial disaster area. I would recommend that this type of coverage be thought of as a financial disaster for this reason.
Please understand that financial inconvenience insurance is not bad. This is a personal decision. My experience is that many people will spend money to have financial inconvenience insurance, but come up short or have no crucial financial disaster coverage. The context I am sharing is for you to better understand what deserves your attention and money to protect.
Financial Disaster Insurance
One of the biggest losses you and your family could sustain is a loss of income. Think of earning $50,000 per year for 30 years. That is a loss of $1,500,000 and would be catastrophic to the household. Your loss of income should be protected against surviving but being unable to work and also in the event of death.
Disability insurance protects you if an event happens that you survive but no longer can work. With a long-term disability, not only is there a loss of income, but you can end up with additional expenses due to your disability.
Life insurance protects the household in the event of death. In this case, the loss can include final expenses, legal, accounting, tax, debt, and loss of income. Life insurance should take into account many factors, even beyond the financial portion (estate planning).
Another type of insurance that is less popular is critical illness. Coverage is a lump sum paid if you survive a heart attack, stroke, cancer, etc. for 30 days. There can be a long road to recovery that is not always covered under other insurance. The funds help to offset your health care costs, such as uninsured prescriptions and treatments, hotel, travel, time off work, home care, and modifications to your home or vehicle. The dollar amount can be less with this coverage as long as you are adequately protected with disability and life. Critical illness can be thought of as filling in the gaps left by traditional coverage.
Insurance can be complex. Our professional independent approach simplifies your insurance planning so that you can be rest assured your family is protected.
I am sending this out as material information to keep everyone informed. This is not a solicitation for any investment. Before making any investment decision, please contact us for professional investment advice through our extensive planning process. This is only meant to provide perspective and update you as best as I can from the extensive ongoing research that we do.
The opinions expressed within this article/communication are those of the Financial Advisor and are not necessarily those of Keybase Financial Group Inc. Any data provided is for illustration purposes only. Clients and prospective clients should always read a product prospectus and fully understand all of the risks associated with the product before purchasing. Any information relating to the discussion of taxation issues is considered to be only general in nature. Clients should seek a qualified tax professional to discuss their specific tax requirements.
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