There are tons of different kinds of insurance out there, but today I’m going to talk about some of the personal coverage you should definitely consider having if you’re currently a home owner or a soon-to-be home owner. I’m not talking about CMHC Insurance which is designed to protect the lender; I am talking about specific insurance policies you can buy to protect yourself, your family and your assets.
Although it’s not always nice to think about the “what ifs”, it’s important to have a plan in place should something unfortunate happen. People put a substantial amount of their life’s earnings into their homes so it makes complete sense to protect the investment with a diversified insurance portfolio. The main types of personal insurance a home owner should have are life, critical illness and disability. Essentially, these three components help to protect your assets in the event that you die, are unable to work or become seriously ill by providing financial coverage. You pay a monthly premium for having them in place.
One thing to bear in mind with most insurance policies is that the earlier you get them, the cheaper they are. From an insurer’s point of view, someone who is a 26 year old female is a far smaller risk than a 63 year old man almost at retirement. More risk equals higher monthly premiums. That said, get the coverage early and your payments stay the same for the entire length of the policy. Some policies last 30+ years, so there is definitely some value to be had. The 26 year old in the example was a client of mine who elected to go with life insurance. Her monthly premium was $32.00. The 63 year old, a different client, was quoted a premium of close to $1,200.00. No brainer. Get the insurance early while you are young and healthy.
Just like shopping for a mortgage, you should speak to a licensed broker when it comes time to look at extra coverage. An insurance broker will have access to a multitude of insurance products (rather than just one that a bank will have) and will be able to explain the subtle differences between all of the different policies. If you don’t know an insurance broker, talk to your financial planner; they will be able to help you. If you don’t have a financial planner, drop me a line and I can put you in touch with one.
It’s a beautiful fall day in Vancouver. Get outside and enjoy it for a bit!
