Don’t worry, Be covered

You probably know all too well that things don’t always go according to plan, and that applies to both life and finances. Job changes. Family responsibilities. Difficult partings. Unexpected emergencies. Broken-down engines.

The universe seems to find a way to absorb any financial “extras” that accumulate in your bank account. With more at stake now, protecting yourself and your family against the unexpected is a more important part of a comprehensive financial plan.

Insurance

As a mid-career wage earner, the two most important types of insurance are disability insurance, to protect a portion of your income if you’re sick or injured, and enough life insurance to cover the financial needs of dependants.  Chances are, if you’re employed, you may be covered for both, but get into the fine print to know what’s covered and not covered.

Disability insurance won’t necessarily cover all illnesses or injuries. Some policies are more generous, paying you if you cannot continue in your “own occupation,” whereas others base coverage on “any occupation,” where you are paid if you cannot perform any job suitable to your education and experience. If you pay your own premium for disability benefits at work using after-tax dollars, any claim you make will be paid out on a tax-free basis.

Estate planning

You’re not expecting to check out anytime soon, but the bare minimum you should do in terms of advance planning is to update your will and assign your powers of attorney – one for your finances and one for your personal care.

Your will should name an executor, identify guardians if you have minor children, and outline your wishes regarding the distribution of your assets. Without a will, someone will have to apply to the court to be your executor and your assets will be distributed according to an established policy developed by the provincial government.