FP Canada Article: How a professional financial planner can help you embrace insurance as the hero in your financial well-being journey
We tend to avoid thinking or even talking about insurance. But here’s how it can be a lifesaver, not a threat, in terms of your financial well-being
What’s the first thing that pops into your head when you hear the word “insurance?” I am guessing it’s one of the following:
It’s too expensive
I don’t need it
It’s a necessary evil
Most of us have accepted we need car and house insurance, but when it comes to other types, we put our heads in the sand. We don’t assign a number to insurance as we would to savings and retirement goals.
Too often, we view insurance as a villain, not a hero. Or, if you’re like my husband, you try to convince your significant other to cancel some insurance policies with the following argument: “Why are you spending money on something you’ll never use?”
But like heroes, you often don’t know you need insurance until you really need insurance.
When our kitchen flooded due to a broken dishwasher and our floors needed to be replaced, insurance saved us thousands of dollars in repairs and the stress of fixing it ourselves.
When a friend was diagnosed with cancer and had to take time off work for chemo, critical illness insurance provided income so she didn’t have to worry about her bills and loan payments.
And when a client’s uncle passed away, his RRSP was taxable to his estate. His life insurance policy covered those taxes, ensuring his beneficiaries were looked after.
So how can you determine your key numbers when it comes to insurance? What’s your number in terms of how much you need? What’s your number in terms of how much you’re willing to spend? This is where the guidance of a professional financial planner is so important.