Guide to insurance

Buying insurance can get pretty complicated. Get the insurance you need for less

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by

From the December/January 2012 issue of the magazine.

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InsuranceYes, we know. Buying insurance sure doesn’t seem simple. Whether you’re trying to insure your life, your car or your home, it doesn’t take long before you’re drowning in sub-clauses and riders. But here’s a secret your insurance company doesn’t want you to know: beneath all of that dense jargon, there are three straightforward rules that you can apply to almost any insurance situation:

  1. Only buy insurance to protect you from unlikely events.
  2. Only buy enough insurance to maintain your existing standard of living.
  3. You don’t need insurance for events that won’t severely strain your finances.

Easy right? Now let’s put those rules into practice. Do you need to insure your kids? No, because if something happened to them, you’d be devastated, but it wouldn’t strain your finances. Here’s another: Do you need disability insurance for your family’s primary breadwinner? Yes, because although becoming disabled is an unlikely event, it would have severe financial consequences for the whole family. Here’s a tougher one: Should you buy life insurance for yourself if you’re 89? No, because sadly, it’s very likely that you will die within the next 10 years, so insurance would be prohibitively expensive.

Want to know more? Read on for Canada’s best guide to getting the insurance you need for less, whether it’s life, disability, car, home or travel. You’ll be glad you did.

Guide to insurance: Life insurance
Guide to insurance: Disability insurance
Guide to insurance: Car insurance
Car insurance: Can big brother save you money
Guide to insurance: Home insurance
Guide to insurance: Travel insurance

8 comments on “Guide to insurance

  1. If my child got sick and I needed to take time off to take care of him you're saying that wouldn't strain my finances? Buying Child Critical Illness would pay a fixed lump sum should that need arise so hopefully no one who takes your advice to not buy insurance for their kids never finds themselves in that situation.

    Reply

    • Sounds like somebody works for Sun Life….lol

      Reply

      • I disagreed with the notion that a parent should never buy insurance on their kid by giving an example of how a child's illness can create a financial hardship and a proffered a solution. If you believe I am mistaken, explain why, but simply saying that I must be in the business is an argumentum ad hominem. Would you rather someone who sells a product not believe in it?

        Reply

  2. Scott said, "Would you rather someone who sells a product not believe in it?"

    Scott, sales is about making money, not faith in products. Very few sales people believe in the products they sell. What they believe in is: Will I meet my targets? Will I make a decent living on a commission only compensation model? Will I have a job tomorrow?

    Strong arming and fear selling are common practices in any given industry. Very few sales people consult with their clients, identify what their needs really are and what best products are available that are a true fit for the client in all aspects?

    This article seems to want to enlighten consumers to figure out their needs and not let a sales person figure it out for them.

    Cheers

    Reply

  3. "Disability is an unlikely event?" Whoever wrote that has obviously never seriously thought about the topic/ Everytime I hear that old adage "There are two sure things in life – death and taxes", I want to scream: "THERE ARE 3" Everyone reading this will be disabled before they die. We do not know the duration or the timing – but it WILL HAPPEN. I have already had one disability in my life – limited feeling in my right hand due to a work accident in 1963 – AND I KNOW I WILL HAVE ANOTHER! When? Who knows? For how long? Who knows? But I will. If you can guarantee me that you will one day just fall over and die, then you may not need disability insurance. However, if you can GUARANTEE that, maybe I should seriously consider worshipping you. I do not for one minute believe he will do this but Stephen Harper could end all federal taxes in Canada with an Act of Parliament. To end all the disabilities that man is subject to would LITERALLY require an Act of God. Before you publish this stuff, you should have it examined by people who understand this material

    Reply

  4. I Agree with Scott on this one.

    "If my child got sick and I needed to take time off to take care of him you're saying that wouldn't strain my finances? Buying Child Critical Illness would pay a fixed lump sum should that need arise so hopefully no one who takes your advice to not buy insurance for their kids never finds themselves in that situation. "

    Emplyer are not forgiving!

    Reply

  5. Pingback: Your Simple Financial Plan, Part 7- Be Wise And Manage Risks | Let's Talk About Money

  6. As a parent of a bipolar son and a great uncle whose great niece had a benign brain tumor – and as someone who knows families in far worse situations I have to dispute your comment about it not being financially devastating if a child gets seriously ill

    Reply

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