Money matters


Insurance planning essential to wealth planning

Provided by RBC Wealth Management
and Dave Dupont

When it comes to preparing for your financial future, it is natural to focus on asset gathering. But don’t overlook the importance of including insurance in your wealth plan to help protect those assets in case you should die, become disabled or require extended nursing care.

Life Insurance

Even if you already have an employer-sponsored life insurance plan, consider whether it will be enough to provide for your family once you are gone. If it falls short, the assets you spent your lifetime saving for your kids’ education and your retirement could be eaten up before your kids or spouse get to that point in their lives.

Disability Insurance

Individuals between the ages of 27 and 50 have at least a one in three chance of becoming disabled for three months or more sometime before retirement, the 1985 Commissioner Disability Table (that is still in use today) states. It is important to ensure that if you are one of these individuals, you have appropriate disability insurance in place to cover your lost wages.

Many employers offer short-term protection to their employees; unfortunately, people incorrectly assume they are protected in the event of a disabling injury or illness. Most employer-sponsored group long-term disability plans cover only 60-70 percent of your annual salary and don’t consider bonuses or commissions when determining your monthly benefit. And remember this income is still taxed, so you might have even less than you think.

Long-term Care Insurance

With people living longer and healthcare costs on the rise, it is also important to consider long-term care insurance when planning for your financial future. If Medicare is not a viable option to pay for care, the average out-of-pocket cost for a nursing home today is about $86,000 a year and the cost is about $39,000 for assisted living. This cost can quickly diminish your family’s assets if you haven’t planned for it. Consider buying a long-term care policy while in your 50s rather than waiting until your 60s or 70s. A policy that costs you $1,000 annually at age 55 when you’re in good health could cost you $3,000 or more per year at age 65 for the same benefits because you are less likely to qualify for the good-health discount, the American Association for Long-Term Care Insurance states.

This article is provided by Dave Dupont, a Financial Advisor at RBC Wealth Management. RBC Wealth Management does not endorse this organization or publication.


RBC Wealth Management, a division of RBC Capital Markets LLC, Member NYSE/FINRA/SIPC

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