Bestplan?...Because Money Doesn't Come With Instructions!
Life is full of constant changes, so pro-active
financial planning involves addressing the whole financial picture.
By establishing financial foundation blocks and creating a logical
order, you can begin to prioritize and make effective choices as
to where your money should be spent, or best invested to meet your
goals. - Ralph
here to view and print out your financial planning checklist.
The first level of the foundation involves adequate Life Insurance,
Long Term Disability, Critical Illness and later Long Term Care.
These programs should be designed to respond to life changes. When
you accumulate the appropriate funds, you may decide to reduce or
eliminate the insurance.
planning includes enjoyment of life, family and reduced stress.
If the goal was to simply accumulate wealth for retirement,
you may become richer, but will you be healthy enough to be
able to enjoy your life later?
Most forms of life insurance (term, group, whole life, universal
life) pay a tax-free sum to a named beneficiary, upon the death
of the life insured. However the similarity ends there. Some insurance
is needed to cover the risk of "premature" death or disability,
only until the children are grown and debts are paid. Another type
of insurance should continue for life, to provide ongoing income,
emergency funds, estimated estate taxation, and payment of funeral
Younger families with higher debts/mortgages and young children
may need more life insurance in the first 20 years. It is important
to determine lifelong Permanent insurance needs, as well as the
amount needed only for a short Term (less than 25 years). Be aware
that renewal rates for 5 to 10 year Term life insurance can increase
as much as 300%-400%
. You can create a proper modular insurance plan tailored to meet
your needs that will not only offer you the best value, but also
significantly lower your long-term
Generally, your needs determine which plan is right for you. Term
and group insurance could be used to top-up
permanent plans. Start with term insurance (convertible to permanent)
if money is tight, but remember that in future, permanent insurance
rates will increase, based on your age at that time. A combination
of term, group, and permanent life insurance could allow future
flexibility. With this strategy, once the children are grown and
debts are paid, you can reduce or eliminate the term insurance,
leaving permanent insurance in place for your lifelong needs. Your
plan should be reviewed and updated regularly, to reflect life-changing
events, goals, inflation, and other factors. Life insurance policies
are not all equal and the differences may be substantial. The same
applies to insurance companies. Some offer far greater future options,
and have better financial strengths than others.
right insurance combination can offer value and lasting peace
of mind, but the wrong insurance plan may prove very expensive
in the long run.
Avoiding The Cost Of Misfortune: Critical Illness,
Long-Term Disability & Long-Term
would your family cope with the emotional and financial burdens of
a serious accident or illness, and how long could you survive if your
income stopped as a result of such misfortune? Your greatest asset
is your ability to make money. A contract worker, business partner,
professional or high income earner should have income insurance protection.
disability, critical illness, and long term care insurance, along
with life insurance, must be considered the foundations of an effective
Click here for a copy of Ralph's
According to the Canadian Cancer Society, the Heart and Stroke Foundation
of Canada and Statistics Canada:
- One in three women and two in five men will develop some form
of cancer over their lifetime.
- One in every 2 Canadians will contract heart disease; half the
victims of heart disease are younger than 65.
- One in every 3 Canadians will develop some form of life-threatening
illness; 40,000 to 50,000 new strokes are reported annually in
Critical illness insurance provides a lump sum payment after diagnosis
and survival of a defined critical illness.
The money is yours to use in any way you wish. Some companies offer
fixed terms, and others, permanent coverage.
A return-of-premium feature (if a claim is not made) is available
from several companies.
Coverage varies from only a few diseases to a wide range, including;
- heart attack,
- coronary bypass surgery,
- kidney failure,
- Multiple Sclerosis,
- Alzheimer's disease
- coma, etc.
Good News: Your chances of survival are getting better!
Bad News: Without the right contingency plan, the cost of survival
could bankrupt you.
Long Term Disability Insurance:
The chances of a 35-year-old becoming disabled for at least
90 days before age 65 are 5 out of 9, according to an insurance
company study. If the disability lasts longer than 90 days, the
average duration could be 2.8 years. The same 35-year-old making
$5,000 per month (with a 5% increase annually) would lose more than
$2.8 million of income during their remaining working life. This
amount exceeds the value of a home, car or other assets which we
protect. Are you adequately insured for long-term disability? Of
the many choices of policies available, some have numerous restrictions,
while others offer rates guaranteed to age 65. A personal long-term
disability plan provides many advantages over a group plan, especially
to self-employed professionals, contract workers, and partners in
Long Term Care Insurance:
Todays rate for nursing home care can be greater than $110.00
per day. With Government subsidies being removed, this could be
twice the amount of a regular home mortgage payment.
This new style of insurance, offered by a few Canadian insurance
companies, addresses the enormous costs for both home care and nursing
home care. As the life span of our population increases, we all
may need assistance eventually. The aging process can prevent us
from doing what we now take for granted. The insurance pays for
both cognitive impairment (inability to think, perceive, reason
or remember) or physical infirmities (inability to perform 2 of
5 activities of daily living - ADLs which include: bathing,
dressing, eating, toilet, or changing body positions). Will you
be able to afford part or all of the costs of such services on a
fixed retirement income? You may not qualify for some government
benefits, as subsidies are predicated on income. Will your loved
ones be required to leave their jobs to provide the necessary care?
There are a number of factors and variations to consider with this
insurance, so consult a knowledgeable and experienced professional.
Click here for a copy of Ralph's
Failure to adequately protect your family's financial security
can lead to financial ruin and unravel all of your efforts to grow
your wealth and complete your future plans.