The Importance Of Reviewing Your Insurance Protection When Markets Are Volatile

When the stock market is experiencing volatility and your portfolio is fluctuating more than you’re used to, it can understandably make you nervous. This is particularly true if you’re anticipating a certain amount of income from your investment portfolio or if you’re making a significant purchase in the near future.

While we know that these dips are an inevitable part of investing and not permanent, sometimes the timing of market turbulence can be very inopportune should you also experience sickness or worse. It’s important to remember that there are things you can do during these dips to ensure that the money you need is available to you or your estate. This is a good time to revisit your financial plan and review the protection you have in place.

If you are counting on your investments at death to be used as income for a spouse, children, a charitable commitment or just paying taxes, reviewing your life insurance policy makes sense. Making sure you have enough protection in place right now will give you peace of mind. Life insurance is, at its simplest, protection that pays out tax-free cash at death. When markets are volatile and it’s not great timing to sell, or when the real estate market is slow and it may be hard to find a buyer for your home, life insurance can step up and play the role of ensuring enough cash is available to solve the cash flow issues that arise after death. “Cash is king”, as they say, and making sure you have enough is a good thing at any time in life.

Regardless of where the markets are now and where they might be in a month or in a year, we all want to know that we have enough in place for retirement, money available to support our family when we’re gone, or enough to pay the taxes on the cottage we’re leaving the kids. Take this time to revisit your financial plan and look at what kind of protection you have in place. It’s a simple calculation and conversation. As with everything, risk management starts with having a plan and we are here to help.


Libby Wildman is a Senior Partner at Davis Rea and our Head of Financial Planning and Insurance. She’s also the founder of The Collective, a women’s entrepreneurship community that hosts events here in Toronto.

If you have any questions or would like to speak to Libby about your own risk management plan, please give her a call (416-324-2205) or send her an email (lw@davisrea.com)

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