Family life and property insurance concept. Wooden figurines representing family and hand drawing umbrella, symbol of insurance.

As an accountant and financial advisor for over forty years, I have preached and continue to preach the need to constantly evaluate and mitigate risk.  That doesn’t mean I would advise a client to not to take any risk, but to assess risks and their potential benefits.

I believe in insurance, but when I propose it, frequently hear excuses.  Excuses like:  “I’m careful and nothing will happen to me”, “it’s not the right time”, “it’s too expensive”, and my all-time favourite, “I’m too busy planning a vacation.”

As you read this, we are dealing with the COVID-19 virus. In light of this, you need to evaluate and fill in your insurance gaps immediately. Currently, insurance company actuaries are crunching numbers and evaluating the new risks the insurance industry must deal with.  Premiums will increase for all types of coverage.  Policies and contract provisions for health, travel, life, critical illness, disability, and long-term care will all change and become more expensive. Benefits included under group insurance plans will certainly change.  And insurance companies will be more diligent when it comes to whom they will insure, for how much, and at what price.

Life insurance companies also provide guaranteed investment funds that invest in the stock and fixed income markets.  These “segregated funds” provide downside protection on investment values.  When presenting these to clients, I often hear objections to the small premium they charge on their management fees as a reason for not utilizing them.  Consequently, hard-earned investment and retirement savings remain totally at risk.  Consider using them for Registered Education Savings Plans (RESP’s) and their unique estate planning benefits.

For the last five years, I have been a volunteer presenter for CPA Canada’s Financial Literacy Program.  Attendees learn how to better budget, save, understand credit and prepare for the unexpected.

Now is the time to take the steps to provide security for yourself and your family.

Stan Swartz, CPA, CMA, CFP, CMC is a retired partner of Sloan Partners LLP and is available to assist you with your financial planning and insurance needs.  He can be contacted at 416 659 7734 or stan@infomoney.ca

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