Try as you may, you are not able to control everything life sends your way. A major life-altering event like sudden job loss or serious illness can throw you and your family for a loop. You can’t prevent these types of things, but the one thing you can do is prepare financially so you are ready for any possible scenario. We have outlined the steps you should take when a life-changing event suddenly crops up:
Sudden Job Loss
The first step you need to take when receiving the news that you will be let go is to seek legal counsel. Contact your lawyer to confirm that the terms of your termination and your severance package are acceptable. You should speak to a financial advisor to see if any portion of your severance is eligible to roll over to your Registered Retirement Savings Plan. You should also consider the possibility that the taxable amount can be split between two years instead of one. If you are lucky enough to find a new job in a timely manner, your severance package becomes a windfall. If you are still seeking employment after a month or two, your severance could run out and you may need to start using your emergency fund along with your Employment Insurance benefits.
Disability
To protect yourself from the financial repercussions of a debilitating injury, disability insurance can help. This type of insurance replaces a portion of your regular income if an illness or injury prevents you from going to work. You may have disability insurance under your employer’s group benefits plan, but you will want to check the level of coverage. If their definition of disability is restrictive, or if the income provided wouldn’t be enough, you want to consider personal coverage to supplement it. If you are self-employed, you should consider purchasing insurance that will replace a percentage of your income.
Critical Illness
Similar to disability insurance, there is also coverage for critical illness. Disability insurance replaces your income, but critical illness insurance covers the expenses associated with your illness. Heart attacks, strokes, and cancer are the most common conditions that are covered by critical illness policies.
If you want to make sure you’re prepared for any life-altering events, you should contact a financial advisor at The Beacon Group of Assante Financial Management Ltd. Having the peace of mind that you and your family are protected from the unpredictable is invaluable.
