4 Reasons to Review Your Insurance Coverage

1. Taking care of what matters

Preparing for the unexpected is not always obvious. The important thing is to do what’s best for you and your family. Therefore, cutting back on your insurance is not the way to go. Anyone can have an accident. And critical illness doesn't just happen to other people.

Since needs change, it’s a good idea to review insurance coverage from time to time—your and your loved ones’ financial security depends on it.

When to review your insurance?

Not just when you’re having money issues. Other situations should prompt you to do so as well. Here are a few examples:

• New job (loss of group insurance)
• Birth or adoption of a child (need for term life insurance)
• Home or car purchase
• Loan for renovations
• Change in marital status (separation, death, etc.)
• Loss or decreased group insurance at retirement
• Inheritance or desire to leave an inheritance
• Business start-up

Imagine these scenarios:

• You or your spouse die and, overnight, the other one becomes responsible for the mortgage payments, child-related expenses as well as household maintenance costs.
• A serious illness or disability forces you or your spouse to dip into RRSPs or personal savings to pay for current expenses.
• You or your spouse must take an unpaid leave of absence or work fewer hours to support a sick child.

Nobody wants this to happen to them. But planning ahead means giving yourself the tools to preserve your family's financial stability when life takes an unexpected turn.

2. Reducing financial stress

Revisiting your insurance coverage is reassuring. It can reduce your financial stress, which is an increasingly common cause of anxiety. Not doing so could even undermine your quality of life and health.

For parents, peace of mind is everything, especially over the long term. When your coverage is tailored to your situation, you can rest easy knowing that if something happens to you, your family will be able to maintain their standard of living.

3. Identifying temporary and long-term needs

Your advisor can help you determine your insurance needs, whether they are short- or long-term. They can also help you find the best solution for you.

Examples of temporary needs:

• Paying off your debt
• Supporting your children until they become adults
• Providing financial security to the surviving spouse

Examples of long-term needs:

• Paying income tax upon death
• Paying funeral expenses
• Paying the estate settlement fees

4. Adapting your coverage to your needs

Do you have a hard time making sense of all the insurance options? Your decision will depend on your needs and what you want to do. If your main priority is protecting your loved ones in case something happens to you, you might consider life insurance or disability insurance, and even critical illness insurance? Let's take a closer look.

Life insurance

In the event of your death, life insurance will provide financial support for your family. For example, it can:

• Cover costs related to your death (funeral, tax, debts, etc.)
• Help your partner and children maintain their standard of living
• Pay off your mortgage or other loan
• Allow your heirs to redeem your shares
• Make sure your business stays afloat, if you have one

This could also avoid your heirs having to inherit a financial burden.

Disability insurance

In the event that an injury or illness prevents you from working, disability insurance replaces a portion of your income. Throughout your leave, you receive a monthly non-taxable benefit, which can help you get back on your feet.

Disability insurance:

• Protects you and your family or your business
• Tops up insufficient group insurance
• Protects your retirement savings

Critical illness insurance

Critical illness insurance pays you a one-time lump-sum benefit when you’re diagnosed with a covered illness. It can serve to pay for things like:

• Bills and daily expenses
• Prescription drugs
• Treatment not covered by other health insurance
• At-home care
• Travel for medical appointments
• Housekeeping services
• Childcare fees

It supplements your income and protects your assets, allowing you or a loved to focus on recovery.

Furthermore, this coverage is a good option for self-employed workers or individuals who want to supplement their group insurance.

What if it were your child?

When a child is diagnosed with a critical illness, it often comes with repeated appointments with a specialist, treatments not covered by the public option and at-home nursing care. Such expenses simply add pressure to the family's daily life.

Critical illness insurance for children eases this financial burden by allowing the parent to be with their child in the event of a covered serious illness or surgery, without having to worry about budget.

Reimbursement of premiums

• Some options provide for the reimbursement of premiums while you are still living.
• If you die before the benefits expire, the remainder could be reimbursed to your beneficiary.

In short, revisiting your coverage gives you a clear picture and allows you to keep an eye on what counts: you, your family and your estate. It’s just common sense, right?