Planning Perspectives

A look at life and finance from every angle.

From personal to professional, from family to financial, there are many facets to your life. Yet, each is interconnected. Planning Perspectives is a source of ideas and information to help you make the most of them all, all together.


Risk Management Demystified

March 8, 2018 Investing Well

Let’s face it: Life is a risk. That’s why risk management is a crucial part of a long-term financial plan. When it comes to investments, we’re talking diversification and asset allocation. When it comes to your family, health, property and income, we’re talking insurance.

But what kind of coverage do you really need? Take a deeper look at four useful types of policies.

Life Insurance

Perception: It’s just for people with dependents.

Reality: It can be used as a flexible planning tool that provides liquidity, and the survivor benefit is generally not considered taxable income.

Though term life insurance is designed to replace the income of a breadwinner if the unthinkable happens, what’s called a “permanent” policy has an investment component that can potentially be helpful for things such as keeping the family business functioning or paying estate taxes after death.

Disability Insurance

Perception: The risk of long-term disability is too minimal to worry about.

Reality: According to the RBC Insurance survey Canadian workers vastly underestimate the likelihood that they will become disabled. Statistics Canada, commissioners disability table A, says that one-in-seven Canadians are currently disabled and one-in-three working Canadians will experience a period of disability lasting longer than 90 days during their working lives.

If you’re out of work for an extended period, the lost income can easily reach six figures or more. Even if your profession isn’t strenuous, you may not be in the clear – cancer is the second-leading cause of claims, according to insurer Sun Life Financial.

Considering all of this, it’s best to get a professional opinion about whether you can afford the consequences of going without this type of coverage.

Time for a Fresh Perspective

Facing risk isn’t easy, but the protection you can gain for yourself and your loved ones makes it all worth it. That’s why you should review your insurance needs once a year and after each big milestone in life. You can always call on your advisor to coordinate with other professionals in determining the proper policies and coverage for you.

Asset allocation and diversification do not guarantee a profit nor protect against a loss. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While familiar with the tax provisions of the issues presented herein, Raymond James financial advisors are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Raymond James Ltd., member-Canadian Investor Protection Fund. Insurance offered through Raymond James Financial Planning Ltd., not a member-Canadian Investor Protection Fund.