“A bend in the road is not the end of the road, unless you fail to make the turn.”
– Helen Keller
Risk management involves the identification and assessment of your exposure to unexpected financial loss due to an unfortunate event that is out of your control. Your advisor can compare your exposure to risk with your current insurance coverage to determine if there are any gaps that may adversely affect your financial security.
Events involving property damage and other risks can easily be managed by ensuring the asset’s value using an insurance policy specific to the asset in question.
Events involving your ability to earn an income such as death, disability and critical illness, are more difficult to manage due to the unknown financial impact posed by each. Calculating the loss in terms of your Human Capital provides an easy yet effective way to manage this risk using an insurance policy specific to the risk being covered.
The lifestyle you enjoy now, and hope to enjoy in your retirement, is only made possible by your ability to earn an income. Due to the high degree of dependency between your ability to earn an income and your other financial planning goals, managing risk associated with your Human Capital is an essential part of any financial planning engagement.
RECORD TYPE: Group Benefits
Group Benefits is insurance that covers a group of people such as employees of a company, members of a society, or professional association. Coverage can include life insurance, health benefits such as prescriptions and dental care along with income replacement.
Suggested Action: Upload a copy of your Group Benefits plan booklet.
RECORD TYPE: Life Insurance
There are three primary types of life insurance:
- Term Life offers the lowest premium for the term covered.
- Universal Life combines tax-sheltered investments with low-cost protection.
- Whole Life offers the best lifetime value for anyone that requires permanent coverage.
When deciding between the different types of life insurance, it is important to select one that you can afford that provides the full amount of benefit you need for the length of time you will need it.
Suggested Action: Upload a copy of all Life Insurance documentation, statements and premium notices each year or whenever you make changes to the coverage.
RECORD TYPE: Living Benefits
There are three primary types of Living benefits insurance:
- Critical Illness pays you a lump-sum should you survive a serious illness.
- Disability Income replaces your lost income due to an injury or sickness.
- Long-Term Care provides money when you can no longer care for yourself in old age.
Suggested Action: Upload a copy of all Living Benefits insurance documentation, statements and premium notices each year or whenever you make changes to the coverage.
RECORD TYPE: Property Insurance
Property insurance is a broad term used to describe policies such as home and auto insurance that provide coverage on the value of the property along with liability insurance. Most offer numerous riders and should be reviewed annually to ensure they continue to provide the best value available.
Suggested Action: Upload a copy of all Property Insurance documentation, statements and premium notices each year or whenever you make changes to the coverage.
RECORD TYPE: Other Insurance
Other insurance includes travel insurance and professional liability insurance among other insurance types. Maintaining an inventory of all the insurance your own will help to ensure it is up-to-date and relevant as your circumstances change.
Suggested Action: Upload a copy of all Other Insurance documentation, statements and premium notices each year or whenever you make changes to the coverage.
NEXT Steps
- Download Resources
Click the Resources link to download and print the various worksheets and templates applicable to your needs. Set aside some time over the next few days to complete each one. Remember to involve your partner/spouse should you have one. - Gather Documents
Complete each worksheet or template and gather other statements and documents for each type of Record to be uploaded to this Tile. - Upload Documents
Using a scanner or the Sidedrawer Mobile App, upload all statements and documents to the appropriate Record for secure storage and collaboration with your family and trusted advisors. - Add Collaborators
From the Sidedrawer home screen, click on the Collaborator icon to add someone you wish to give access to one or more of your Records. Enter their email, name and relationship to you, then select the Record and permissions to be granted.
Click here to print the Risk Management Document Checklist.