Insurance Understood: Vacation property
By Steve Meldrum on February 4, 2023.
Do you have a vacation property? Or do you have a family member or friend that does? I’m happy for you if you have a connection as there some great memories that come from vacation properties. Just think back to a vacation home visit you’ve had… nice, right? It’s amazing how you haven’t forgotten about that. Most people dream of having a vacation home but only a few really get one. Why? Usually because they want to feel secure about their primary home and payments first. Then, if they feel there is capacity, they can explore getting a vacation property. Well, this got me thinking about life insurance and the general order of purchasing it. There are two main categories of life insurance. The first is term insurance and the second is permanent insurance. Term insurance is like the primary home, it should be able to meet your needs and protect your family. You will want the amount of coverage to be big enough to replace your income, pay off your debts and maybe a few other things like cover a child’s education. There are a lot of options here that can fit anyone’s needs. Some peoples needs are larger or smaller than others, so don’t worry about comparing yourself to others. Simply find the neighbourhood that fits you and your needs. If you aren’t sure where to go, reach out to an insurance advisor. It’s almost like they’re your realtor. If you want to do it on your own, you can do that too. Permanent insurance is like the vacation home. Although it’s nice to have, not everyone should buy it. Before you consider permanent insurance, you should have enough term insurance in place to match the needs of your family. Then, once you have that figured out, you may want to consider permanent insurance. It costs more than term insurance, so you need to be prepared for that. If you find that you have great, stable cash flow or have accumulated wealth that you know you cannot spend in your lifetime, then you can start exploring permanent insurance. I have to say, this is the best part of my profession. Why? It’s creative, unique and people are usually humble to be in that position. Once someone has everything they need, I find they are trying to do more for others. So, the permanent insurance is often a selfless act or a way to maintain family wealth, unity and harmony. It’s comparable to that vacation home that has been passed on from generation to generation. It’s bigger than you and you can create a legacy. If you want to make an impact now and into the future and have capacity to support it, it’s worth exploring permanent insurance. You should work worth an insurance professional when you get to this point because there are a lot more variables than with term insurance. It’s an asset that not everyone can afford but if they can, they love it. Just don’t get ahead of yourself, make sure you have your primary term insurance covered first. Once you have taken care of those core needs, then the adventure begins. Steve Meldrum B.Mgt. CFP CLU is the founder of Swell Private Wealth Ltd. For over a decade he has specialized in helping individuals and businesses expand protect and perpetuate their wealth. For further information or tailored advice, contact him at 403-487-0490, steve@swellwealth.com or connect on social media 15-14
