Insurance

Your insurance coverage should be an important and integrated part of your financial plan; one that requires regular monitoring.

Now that your children have left home, you may want to meet with your insurance agent(s) to review your current coverage.

What Comes After Life Insurance?

Do you need to continue with life insurance after the children have finished school and left home? That’s a question that many empty nesters ask themselves, and the best answer might be: Yes, you could benefit from insurance in the years ahead, but it might not be the kind of insurance that has protected you and your family for years. The following looks at the various types of insurance you might want to consider, now that you’re an empty nester.

Disability

Think about it: what would happen if suddenly, due to an illness or injury, you were unable to work? Without your paycheque, how long would you be able to make your mortgage or rent payment, buy groceries, or pay your credit card bills without feeling the pinch? According to Great West Life, one in three people, on average, will be disabled for 90 days or longer at least once before age 65; the average length of a disability that lasts over 90 days is 2.9 years.

This is where disability insurance could help; think of it as insurance for your paycheque. It ensures that if you are unable to work due to illness or injury, you will continue to receive an income and be able to make ends meet, until you are able to return to work.

Critical illness

Critical illness insurance provides a tax-free lump sum if you are diagnosed with, and survive, one of a specified list of diseases or afflictions. Different insurance companies will cover different illnesses, but the standard four are cancer, coronary bypass surgery, heart attack, and stroke. You can usually add other diseases and medical conditions to the policy at an additional cost.

The lump sum received can be used for any purpose, including reducing financial commitments, such as paying off your mortgage. Or, if necessary, the money could help you to modify your home or vehicle to address mobility issues. You can pay for domestic help during recovery, or the money could allow a family member to take time off work to help look after you. If you don’t have a good disability plan at work, you could use the money to replace your income and keep your household going while you recuperate. You could also use the money to access medical services or treatments that are not covered by private or government plans.

Automobile

Every parent is well aware of the high cost of insurance for young drivers. Now that your children are away from home, you should decide whether they need to be covered on your vehicle(s). If your children are out on their own and earning an income, it is probably safe to suggest that they could assume the costs of insuring their own vehicle. If they are away from home at college/university, you should decide whether they still require coverage and, if so, for what time period.

Discuss your insurance needs and options with your advisors.