Insurance. Did you recoil when you read that? I know, it's not the most interesting topic but let me just repeat what I am sure you already know - it's a damn important one.
It can be overwhelming when you decide to get some insurance. I think that this can be one of the biggest obstacles, even bigger than affordability. There are so many different kinds of insurance - let's take a quick look at the 3 main categories of insurance:
1. Life Insurance - paid upon death
2. Disability Insurance - paid upon injury or illness
3. Critical Illness Insurance - lump sum paid upon serious illness
Now, within these 3 main categories of insurance there are many different types in each category you can apply for. By "type" I mean the kind of insurance can vary. For example the insurance can be temporary or permanent. There are many different options, including length of coverage, amount of coverage, pay out options, cash value, return of premium (getting money back that you paid) etc.
A few things you need to know before you decide on which insurance you want/need, are:
1. What do I need the insurance to cover? (Income, bills, debt, future income for family, savings, taxes, final expenses like funeral etc.)
2. How much money would I need if (I died, was sick, couldn't work etc)?
3. Do I want this coverage to be there for a certain period of time (10 or 20 years?) or for my entire life?
What I have found over the last 9 years in this "business" is that often when people need insurance, they cannot get it. What do I mean by that? Well, when someone has had a health "scare" either for themselves or for a family member that reduces their ability to get insurance because they are a higher health risk. My advice - do not wait until you have had a scare, get insurance before you need it while you are healthy. This is called "guaranteeing your insurability". Do it.
Most of us know what life insurance is. You die, your beneficiary gets paid the amount you selected. But do you know what Critical Illness insurance is? With critical illness you get paid a "living benefit" which means, you have been diagnosed with a critical illness, you are still alive and you get a lump sum pay out. With how many people are getting sick and living through it these days - I would say this type of coverage has become more and more important. I would even go as far as to say it's vitally important and could mean giving you options that could save your life.
When you are looking in to insurance there are things to consider:
1. Is this a personally owned product or is this creditor protection (do you own the policy despite where you bank, work or live?)
2. Read the fine print - know when it won't pay out and when it will
3. Find an advisor you trust with your life and can tell anything and everything to - who is thorough and provides education not just opinion or tells you what they think you should do.
4. Where can you find money in your budget for the coverage you need? Most of us have a leaky faucet problem when it comes to money and usually we can find some area in our budget to tighten up.
5. Understand yours and your families needs. This is a discussion for all partners to be present at.
Deciding on which type of insurance you need can take 2-4 appointments on average. There is discussion, understanding, education and decision making that needs to happen.
Preparing for the application process: (you want to do a full medical questionnaire, this helps ensure that your insurance is in fact in place and not subject to underwriting at time of claim aka when you die or get sick).
1. Know your health history
2. Know your family history
3. Know your financial situation - income, net worth (assets - liabilities), and how much insurance you need as mentioned above.
We insure our cars, our homes, and everything else WE pay for - it's high time we properly insured ourselves so that when the poop hits the fan, we are prepared.
Q: What's your biggest asset?
A: YOU.
Grace Edison
Lakelse Financial
4546 Lakelse Ave
Terrace, BC
250-635-6166
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