Insurance – Time to Stop Thinking Chronologically
Jon Glougie, CFP®, Investment Advisor, DWM Securities Inc.
Insurance Advisor, Dundee Insurance Agency Ltd. October 11, 2013
When planning for your financial future, it makes sense to start saving early. Regular contributions into your RRSP or your TFSA make sense. The earlier you contribute, the earlier that your money can begin to grow, and the more money you will have to help you retire.
Insurance seems to be an afterthought while it is the most reasonably priced. Consider this, when you’re young, you are presumably in good health and your life expectancy is long. As we age, our health typically declines (it’s just a fact of life) and our life expectancy shortens. The older you get, the more expensive insurance gets. Therefore, when you’re building your financial plan, you really should be exploring your insurance options. Insurance planning is no different than investment planning, in that it requires review on a regular basis. Purchasing your insurance while you’re young can help you manage your financial needs efficiently throughout the course of your life, without having to worry about it when you’re older.
It can be difficult to assess your life insurance needs when you’re young. Many believe that death is something to deal with as they age, or in other words, when life insurance gets more expensive. Many also have a difficult time assessing how much insurance they need. A comprehensive insurance review can not only help you determine an amount, but it will also help determine a suitable product. Most life insurance products offer convertibility options, which allow you to get your foot in the door now, while not closing any doors in the future. Remember, with some life insurance products, you can pay off your policy within a certain period of time (10, 15, 20 years, etc.) while still having coverage for life.
Critical Illness Insurance
Most people aren’t worried about getting sick when they are young. Illness is commonly associated with getting older, and, while this isn’t always the case, the same concept of insurance cost applies. With Critical Illness insurance, you can pay into a policy while you’re young, and if you never have to use it, you can get all of your monthly premiums back. Remember, this insurance is intended to help protect your assets while you’re accumulating your wealth, helping to ensure that an illness doesn’t change your retirement/savings path. If you never use the insurance, you can get all of your monthly premiums back in retirement… more retirement savings!!!
Financially speaking, it makes the most sense to get your insurance needs looked after while you’re young. Don’t procrastinate on this portion of your financial plan. It’s always important, and it’s not going to get any cheaper than it is today.
* Insurance products are provided through Dundee Insurance Agency Ltd.