Senior Living: Don’t underestimate insurance

You likely need more coverage than you think

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Do you have enough insurance?

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It surprises me how many working Canadians still have so little insurance to protect their family or lifestyle should something unforeseen happen. Even as we make our way out of the pandemic, I still see many people who simply feel it is too expensive to buy insurance.

Let me ask you a question: what do you think is your single greatest asset? It is not your home, your car or your coin collection. It is you. Your single greatest asset is your future earning potential and your ability to earn an income from employment or self-employment.

Here’s another question to ask yourself: What are the chances of something happening in the future, that will have a substantial impact on your current lifestyle? Well, of course, short of gazing into a crystal ball, no one can answer that one.

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Most people believe they have adequate insurance coverage for their home or vehicles, yet many fail to consider the risks associated with a personal disability. Ask any insurance agent, and they will tell you. There is a much greater risk of you becoming disabled than dying from an accident. Of course, many Canadians acquire disability insurance through their employers under a group coverage program, but many never check to see if it really is enough.

Over the last 35 years, medical advances have enabled us to live longer, improving the likelihood that you will survive a critical illness. Fatalities from heart attack or stroke are down 50 percent from the 1980s and today more than 70 percent of people will still be alive five years after experiencing their first heart attack.

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The survival rates for many types of cancer have increased dramatically too. Overall mortality rates have declined; however, our morbidity rates have increased. Every day the number of people who live with a critical illness is on the rise and according to Stats Canada, 33.2 per cent of Canadian seniors retire with disabilities. It is important to also mention that Canadian women have the highest prevalence of disability in all age group studies (2019).

So, what should you do? Start by identifying your potential risks. Everyone will have a different situation. Although you may receive some benefits from your employer or even a CPP / QPP disability benefit, ask yourself, is this going to be enough, especially long term?

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The fact is, most people rely heavily on their ability to earn an income, and many live paycheque to paycheque. If you were faced with a disability, do you have the insurance in place to protect your family and your lifestyle? No one wants to suffer a severe unrecoverable financial hardship.

Risk management anticipates, prepares for, and implements a solution for any potential risk to your financial security. Of course, you will not be able to mitigate everything that life has in store for you. But you can lessen the damage through good insurance, constant planning, saving for your future and having a good emergency fund to fall back on if needed.

– Christine Ibbotson has written four finance books, including the bestseller How to Retire Debt Free & Wealthy. info@askthemoneylady.ca

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