Fortune favours the prepared: The role of insurance in your financial plan

A proper financial plan should cover all aspects of your finances, from investments and real estate to paying down debt and tax and estate considerations. Not only that, it should help you be prepared for unexpected events. You want to be able to protect yourself and your loved ones and reach your goals even in the face of financial hardship. That’s why insurance should be a key component of your financial plan.

Insurance can take many forms. No one-size-fits-all approach or policy will work for everyone and it’s important to use the solutions that are right for you based on your family, age and financial situation.

Life insurance

When properly tailored to your needs, life insurance provides important benefits, including covering your financial commitments and death-related expenses, allowing your family to maintain their standard of living and for you to leave a legacy. Life insurance has evolved over the years and today there are options for building wealth or tax-free investments. When and why you should buy life insurance depends on a variety of factors. Common scenarios are for new or established families, homeowners and people with mortgages or other debt and business owners.

Critical illness and disability insurance

If you’re in the workforce, disability income insurance can guarantee that you have a source of income should you be unable to work due to an accident or illness. This allows you to continue to meet your financial obligations as well as settle expenses related to your physical condition.

Likewise, critical illness insurance can be the ideal solution if a temporary work stoppage and additional expenses resulting from a critical illness would impact your finances.

In a time when one person out of 4 will develop heart disease (Source: Heart and Stroke Foundation of Canada) and 1 person in 3 will develop some form of cancer (Source: Canadian Cancer Society), having this type of insurance in place can be integral to ensuring health issues don’t negatively affect your lifestyle.

Long-term care insurance

Unlike critical illness and disability, which can happen unexpectedly, long-term care could well factor in as part and parcel of normal aging. You may need to be cared for in your home or transition your care to a long-term facility.

Long-term care can be expensive and quickly deplete a lifetime of savings. Unfortunately, many people mistakenly believe that government programs will cover these costs. In fact, while many long-term care facilities and home-care services receive public funding, most also charge co-payments or extra fees for additional services that aren't offered under the long-term plan.

Long-term care insurance gives you the added protection that government plans alone may not provide and helps minimize the cost and stress to you and your loved ones. Bear in mind that you may not be eligible for coverage if you’re already at a stage that requires long-term care. For that reason, it can be beneficial to buy long-term care insurance at an early age, when premiums may be lower. You may be a good candidate if you’re between 50 and 65 years old and have a history of family illness covered under these policies.

Life and insured annuities

Guaranteed income in the form of an annuity is a way to secure a steady, fixed income during your retirement. With an annuity, you make an up-front investment in return for a steady stream of income in the future. Some annuities allow you to defer receiving payments and still generate interest from your investment, enabling you to increase your income stream at a later date.

If you’re thinking about an annuity, consider talking to a financial professional for help determining the appropriate features for you, when to buy it and when to start receiving payments.

Segregated funds

Segregated funds are similar to mutual funds, but what sets them apart is their guarantee of investment protection against possible market downturns at maturity and in the case of death. Distributed exclusively by insurance companies, segregated funds are comprised of stocks, bonds or market securities, are managed by experienced portfolio managers and have asset mixes that suit all investor profiles. Other advantages include quick settlement in the case of death thanks to beneficiary designation and potential creditor protection.

Risk management for business owners

When you own a business, your risks multiply. Your business could be interrupted for a variety of reasons. Disaster, property loss or the death or disability of a person key to the business’s success are all possibilities. In many cases, you’ll need specialized insurance coverage above and beyond what you have personally. When it comes to navigating the many financial issues created by a business and understanding the best approach for insurance, professional expertise is often necessary.

Because life happens

An experienced Insurance Advisor will apply an integrated risk management strategy which addresses every aspect of your life – and all circumstances that could affect your financial well-being. To learn more about the benefits of our holistic planning approach, please contact us today.


iA Securities is a trademark and business name under which Industrial Alliance Securities Inc. operates. Industrial Alliance Securities Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. The above information is for reference only. iA Securities does not offer insurance products.