Make sense of insurance

In life, is some amount of risk inevitable? If you answered yes, you’ve just made the case for owning insurance.

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Victor Skot, FCA is one of four principals in the consulting firm Benefit Partners, which specializes in group benefits, pension plans and executive compensation strategies in the Barrie area. He says that having insurance is the easiest way to make sure there is an umbrella over your head, not just on rainy days, but when thunder showers hit. Here are some points that Skot suggests to keep in mind as you decide what kind of insurance you need, how much you need and when to purchase it. Start with a solid financial plan – Good business advisors will include insurance as part of your bigger financial picture. They will help you determine where you are today, where you want to go, and where the road is that connects the two. They should spend time getting to know you and your family, and offer a plan that’s both financially secure and flexible enough to allow for changes in circumstances as life progresses. Protect those you love – “Most Canadians are highly in debt,” Skot says, “living pay to pay.” What happens when a chunk of that income suddenly gets interrupted or stops altogether? Life insurance gives family and loved ones the funds to keep operating, at least for a while, if a principal breadwinner should pass away. And these days, it only makes sense for both wage-earners in a family to be insured. Protect yourself - If you don’t have some disability coverage through your employer, consider a policy that would at least provide living expenses if you were unable to work due to illness or injury. Banks will often insist you have a plan to pay the mortgage if you should die or become disabled, and may even offer you their own brand of insurance. Skot suggests you shop around to find the best protection for you, your home and your money. Protect everyone else - Homeowners often fail to consider what might happen if a neighbour slips and falls in their driveway. Public liability insurance for your home is just as crucial as it is for your car. Protect your property - If you have a home, cars or anything else of value, you need insurance. A policy will protect you against calamity, damage or theft, and banks and other financers will often insist you carry insurance in order to qualify for a mortgage or loan. Special circumstances, special needs - If you work from your home or run a business from it, make sure your property and casualty insurance company is aware of it. Professionals who give advice to the public (i.e. doctors, lawyers, dentists, etc.) are usually well advised to carry errors and omissions insurance to protect them and their clients/patients. The insurance policies all Canadians have - We all have access to certain public forms of insurance or support, more commonly referred to as Canada’s social programs. Employment Insurance provides a certain level of income for a finite period under specific conditions, including maternity leave, lay-off or short-term illness. In Ontario, the Workers Safety and Insurance Board offers compensation to people hurt on the job, providing the employer has participated in the plan. And all Ontarians rely on the most heavily accessed, most expensive and most important kind of insurance of all: the Ontario Health Insurance Plan. Brought to you by the Institute of Chartered Accountants of Ontario.