Insurance is boring as hell, but it’s the difference between a financial setback and financial ruin. I found this out when I had to take an extended period of time off of work. When I was first diagnosed it was very serious and I knew I was not in a good mental state. I had a lot of appointments and tests that needed to be done and frankly I needed to prepare to die. I had to get my financial house in order and make sure that everything was documented. That included making a will.
Thankfully I had disability coverage through my employer. First I worked through my short term disability which was a significant portion of my income. Then after six months I went onto long term disability, which was a smaller portion. And while my income was diminished, at least I had an income! Just because I was not earning as much doesn’t mean the bills stopped coming.
Disability insurance is huge deal and most people ignore it. You’re way more likely to become disabled than die during your working years. If you become unable to work, disability coverage replaces part of your income. Not to mention that if you’re dead, it ain’t your problem anymore! Some employers offer it, but it’s usually not enough. Look into getting your own policy to top up the amount. This is where a budget is handy because you can calculate what the minimum amount you need to survive.
Health coverage is obvious if you’re American, but even in Canada, consider supplemental coverage for things like dental, prescriptions, and physiotherapy. A root canal can cost $2000. That’s a decent vacation you’re not taking. If you are injured and need physio therapy it can be quite expensive if you’re paying out of pocket. And not getting treatment can compound the issue, or lengthen recovery time.
Fun is like life insurance; the older you get, the more it costs. ~ Kin Hubbard
Mortgage insurance pays off the mortgage if you die, so your family doesn’t need to worry about housing. However, as you pay down the mortgage the value of the insurance declines. You can get mortgage insurance that covers illness, disability and job loss but it is more expensive and there are limits. I never bothered with mortgage coverage but instead opted for more life insurance. It allows my family decide if they want to pay off the mortgage or use the funds in some other way.
Life insurance is cheap when you’re young and healthy. If anyone depends on your income – spouse, kids, parents you help out – get some term life coverage. Don’t buy whole life insurance, get term insurance and invest the difference. This is because you may only need insurance for a set period of time. In my opinion, you are better off getting enough life insurance to cover the mortgage and that way the payout doesn’t change and your family can use the extra however they need to should the worst happen.
Pet insurance is also a good idea. If you get the coverage when the pet is young it is relatively cheap. It can save you from having to make very hard decisions around the life and health of your pet. Our dog hurt his leg and the bill for just the x-rays and check up was $1,600 because I didn’t have insurance.
Home or renter’s insurance isn’t just about fire and theft. It covers liability too. If someone slips on your stairs and sues you, you’re covered. When I was renting, my renter’s insurance cost $200 a year. My laptop alone was worth more than that. I had two condos get leaks in the ceilings from the units above. Their coverage took care of it so they didn’t need to.
Insurance isn’t glamorous, but it’s the backbone of financial security. The reality is, life is unpredictable—illness, accidents, and unexpected expenses can derail even the best-laid plans. Having the right coverage in place means you won’t have to choose between your health, your home, or your family’s future. Review your policies, fill the gaps, and make sure your financial safety net is strong. It’s not about planning for disaster—it’s about protecting the life you’ve already got.