Financial Adjustments “Full Value” Life Insurance We have had many inquiries since our last article (June 2010-“Financial Adjustments”) on the topic of life insurance. The two most common questions being asked are: “Who should own life insurance?” and “How much is appropriate?” or she owns a practice, works for someone else, cares for family members, or cares for their home. The value of an individual, in his or her role in life, is an asset and should be insured. E HOW MUCH INSURANCE WILL YOU NORMALLY GET? In the financial media, you may read many articles about life insurance and how to de-termine the “need” for it. It is unfortunate that many life insurance advisors have been improperly trained; they have been trained to determine the amount of insurance a per-son should own by using what is called a “needs analysis” calculation. Why do we say that “needs analysis” type planning is inappropriate? We say it be-cause no beneficiary or survivor, given the choice, would want only an amount of insur-ance that they supposedly “need” rather than the true value of the insured person who died. Insurance companies will insure individuals up to their economic life value. That amount is the most that they will offer. You can’t get more than that amount, just like you can’t get more home insurance than what your house is worth. HOW MUCH IS ACTUALLY APPROPRIATE? If your house were to burn down, you would want to be reimbursed its full value, not less, through your insurance. Similarly, when a person dies, the beneficiary would not want less money than what the deceased was worth. Why would the beneficiary only want what was needed to make ends meet, and leave the true value of their loved one uninsured? www.canadianchiropractor.ca CANADIAN CHIROPRACTOR | SEPTEMBER 2010 • 65 veryone should own life insurance. First of all, we would like to emphasize that everyone has a value, and any-thing of value should be insured against loss. Every adult is an asset, whether he Paul Philip, CFP, CLU and Nancy Philip, CFP, CLU are a dynamic sib-ling team who have been advising hundreds of chiropractors across Canada since 1992. Their firm, Fi-nancial Wealth Builders, is located in Toronto, Ontario. To learn more about building your wealth, visit their website at www.fwb-inc.com or contact Paul or Nancy at 416-497-0008. feature Paul Philip, CFP, CLU Nancy Philip, CFP, CLU
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