In the last two newsletters we have addressed two important components of your financial plan: estate planning and budgeting.
However, having the most considered estate plan and the most efficient budget is no guarantee of success.
To quote the well-known Scottish poet, Robert Burns, “the best laid schemes o’ mice and men gang aft agley”. What is the largest enemy of your financial plan?
In one word: RISK.
For many people, the word risk is first thought of to be the risk they are taking in his or her investment portfolio.
While this is unquestionably a component of the risk to your financial plan, other equally important risks are sometimes not addressed or under-addressed.
Typically, these are the risks that require the liquidity of life and health insurance products.
For example, if you pass away tomorrow, can your financial expenses be covered?
Will your family have sufficient cash flow to maintain their lifestyle?
Will your children have sufficient funds for post secondary education?
Can your income be maintained in the event of a disability?
In the financial planning process, putting proper risk management in place comes before constructing a retirement plan. This makes sense: if you are in your late 20’s with a family, retirement is many years away - but a loss of income owing to premature death is a risk for today.
Constructing a sturdy risk management strategy makes a solid foundation for your retirement plan.
A number of factors sometimes convince people to avoid proper risk management. Perhaps they feel they will not be insurable, it takes too long to complete the application, or cost may be an issue.
While not every application for life and health insurance is approved, changes have been made to products and processes over the last decade that are having the effect of making at least some coverage available in most situations.
The best way to know both what coverage you should have as well as what is available, is to speak with your Scrivens advisor. Don’t put your plan at risk: contact us today for a meeting: 613-236-9101 or email Ken Browness.
