Introduction

Personal risk management is the process of applying risk management principles to the needs on an individual basis or for a family. When assessing risk the process involves identifying, measuring and establishing a plan to cover the risk followed by a monitoring of the risk and making any necessary adjustments due to the changes that occur during one’s lifetime. A well established financial plan will incorporate a risk management strategy that will protect against the risk of loss that that can occur during your life.

A personal risk management plan can help you assure that you are protecting the people you care about and give you the peace of mind you deserve. The majority of people never develop a plan for managing financial risks. You may very well be part of this majority who have never sat down and actually developed a plan for dealing with those events that could pose financial risks to you and your family.

Without a plan, you may be over insured in some areas and under insured in others. You may be unaware of the risks to which you are exposed and you may be insuring risks that are more emotional than financial in nature. Using an in depth analysis a financial advisor can provide you with and in depth analysis of methods and ways to address any of your personal risk exposures ranging from premature death to poor retirement life. Everything from determining the right type and appropriate amount of insurance, to properly diversifying and allocating your financial portfolio, to making sure you not only have an up to date will in place.

Insurance is a valuable risk-financing tool. Few people have the reserves or funds necessary to take on the risk themselves and pay the total costs following a loss of life or disability. Using a line of credit or selling investments such as RRSPs to pay for the short fall in income only means someone’s financial future may well be sacrificed. The key is to dust off the benefit hand book, review what benefits are in place and add or enhance where necessary.

Insurance is the one thing you pay for but never really want to use. What if we called it DISASTER PREPAREDNESS because that is what it really is? In a perfect world nothing would happen to any one at any time. But it’s not a perfect world. Insurance allows one to get back in the game financially without having to start from the bottom.

When a disaster like cancer or a car accident that causes injury occurs, it usually is out of blue. When entrepreneurs go to the bank to get a loan for a business, it is common practice for the bank to require insurance as a condition for the loan. Why? Well, because if something happens to the borrower, the bank is protected. Maybe the banks know something about risk management. As my dad said your health is your most important asset.

Table of Contents

1. Life Insurance
2. Disability Insurance
3. Critical Illness Insurance
4. Long Term Care Insurance
5. Asset Allocation
6. Dollar Cost Averaging

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