I love Christmas, always have and hopefully always will. However, as I tried to find time to write this blog, I am wondering why, in the name of all that is good, I offered to add something else to my plate just before Christmas time of year! I worked really late hours in my business to ensure that all was in order before the holidays and to make sure that every one of my clients received a personally signed Christmas card, I entertained 50 plus friends and family at our home for our annual Christmas Caroling Party, and I won’t even start about my volunteer responsibilities. During the weeks leading up to Christmas, when I awoke in the middle of the night with my “will not turn off” To Do list front of mind, Joni Mitchell’s lyrics kept playing in my head:
“It’s coming near Christmas, they’re cutting down trees
They’re putting up reindeer and singing songs of joy and peace
I wish I had a river
I could skate away on “
But honestly I really do love Christmas! 🙂
I am guessing that those of you reading this are nodding and agreeing ….sounds familiar, right? It’s a very busy time of year, especially for women! Sorry Santa, but I have been saying for years – women do most of the work in making Christmas happen for our families. And for some reason, especially as self-employed women, as entrepreneurial business owners, we feel we can take on more and more responsibility…..we keep adding to our To Do list. Not just at Christmas, but all year long. We are often high energy, creative women, very involved in our communities and we keep saying – sure, I can do that (or for heaven’s sake, let me do that…..so that it gets done)!
Which brings me to this point: we are looking after so many people and things, but are we looking after ourselves? Are you looking after your health (fitness and nutrition)? Are you taking care of your financial health? There are so many facets to our financial health and as Patti Lovett-Reid pointed out in her key note address at NLOWE’s annual conference last April – “Everyone Needs a Financial Plan”!
So let’s look at just one component of your financial security; one of the most important: Are you protecting this incredible ability you have to run a business and earn an income? In other words, have your insured your ability to earn an income?
Think about it……we insure our assets, our homes, our cars. But do we insure our biggest asset – our ability to earn an income? What happens if you become sick and are unable to work or run your business for a period of time? What contingency plans do you have in place if you have an accident tomorrow? Many of us, particularly women like ourselves, feel we are invincible – that won’t happen to me, that can’t happen to me…I have too much to do! But it does happen.
Actuaries tell us that if you filled a room with 1,000 people all aged 40; nearly half of them will suffer a long term disability before age 65. 48% of mortgage foreclosures are caused because of disability. Long Term Disability coverage will help ensure that you and your family’s lifestyle will not suffer if you become sick and unable to work. Disability insurance provides a regular monthly income to pay the bills when you are not able to work.
The majority of self-employed individuals are not eligible to get even the short-term income benefit available through employment insurance (EI). Yet another reason why as a self-employed woman, you need to put something in place. The maximum amount of allowable disability income is approximately 2/3 of your earned income. Self-employed individuals are permitted to enhance this limit. When you pay the disability insurance premiums yourself, and I always recommend that you do, the income that this protection provides is non-taxable.
Disability insurance can be customized to your specific situation and need. Your income, available cash flow for the premium, waiting periods, and term of coverage can all be determined based on your particular circumstance. There are numerous riders that can be considered. There are also types of disability coverage available to cover business overhead and key person coverage. Long Term Disability can appear complicated, but it doesn’t need to be, if you speak with someone who has expertise in that area.
Make it a New Year’s Resolution for 2014 to start looking after YOU! We are all so very good at looking after our clients, employees, children and parents, but how can we – if we don’t look after ourselves first?
In my next blog – I will look at another type of protection, critical illness. Some business owners show little earned income because of the expense of running a business. Disability insurance might not be the most suited protection for you, critical illness is another option.
Kathy Cormier is a Certified Financial Planner, the only recognized designation in Canada for Financial Planning. Kathy is self-employed as a financial professional running her own practice, with Investors Group and has been providing financial planning advice to individuals and business owners throughout Newfoundland and Labrador for 17 years. Check out Kathy online at www.investorsgroup.com/en/kathy.cormier/home.