Life constantly throws curve balls; and while they can often be dodged, sometimes they connect and injure aspects of our lives. This is why being prepared is so important. When it comes to what we care about, like: health, wealth and romance, having personal insurance is the best way to stay on the safe side.
As you read, consider this sentence, “The cost of not having insurance is nothing compared to the cost of living without it”.
The problem with most of us is knowing what types of insurance we need because of individual circumstances. Our age, lifestyle, health, education, children, and other important factors play a role. The good news is that this can be simplified. Below, we’ll look at the three main types of insurance recommended by financial experts.
Three Types of Personal Insurance to Keep you on the Safe Side
The untimely death of the main income earner can devastate a family. Experts recommend that there is enough coverage for 10x the annual salary for the wage earner. This ensures the death benefit amount is enough to cover expenses (present and future), funeral expenses and provide the family a financial cushion to allow them time to grieve and regroup. Two life insurance options are permanent (for life), and term (temporary while required).
We’re all living on a wire with respect to our health. One serious illness diagnosis can lead to bankruptcy. One inexpensive way to protect ourselves is to participate in a group employee plan where you work. The problem with that is many small businesses don’t offer health benefits; and if they do they might not be enough.
In both instances personal insurance steps in to save the day. If you’re without group benefits, or if you have a small benefit plan through work, you can supplement with your own personal health insurance policy.
You can get a critical illness rider to cover serious illnesses. This type of insurance pays a lump sum upon diagnosis of a serious disease such as cancer.
Most people don’t think they’ll need long-term disability because they won’t become disabled. The flaw with this reasoning is that 1 in 7 Canadians aged 15 or older reported a disability in 2012, which is 14 per cent of the Canadian population, and 3.8 million people. Chances of being disabled are significant, and most accidents happen at home.
Even a great health benefit package and sufficient life insurance policy isn’t enough protection if one can’t work due to an injury. A disability can last months to years, and sometimes for the rest of one’s life. A longer-term disability policy will help to replace part of the lost income.
Do you have enough savings to pay for even three months of lost wages?
For more information about personal insurance and to discuss your needs and option, speak with an insurance broker. The consultation is free and can help you discover what products best suit your lifestyle.