It’s been over a month since the country — and the entire world — went into lockdown in response to the COVID-19 crisis. Canadians’ lives have changed dramatically over the last few weeks, with new regulations emerging daily, and it understandably has people concerned about their future. One of the biggest questions on everyone’s minds comes down to finances: am I financially stable enough to weather the storm? What supports are available to me during the coronavirus crisis? Don’t worry. Prometheus Private Advisory Group is here to answer all your financial questions and to support you through these difficult times.
While the situation we’re in is serious, it doesn’t have to be all doom and gloom. Armed with the right information, guidance and financial strategies, you’ll come through this just fine. Remember, this is about more than insurance — it’s about overall financial planning and setting yourself up for the long run. If you’ve taken a financial hit due to COVID-19, these are the big questions to ask to make sure your finances will carry you through to brighter days.
1. Do I Have a Financial and Budget Plan?
Over three million Canadians have applied for COVID-19 job benefits since mid-March when the crisis took a serious turn. If you’ve lost your job or had a change in income due to the current situation, it’s time to act fast to create a plan for your financial longevity. This starts with understanding what government sources of income are available to help you get through the next few months, from wage subsidies to tax breaks to so much more.
Fortunately, the government has ramped up its efforts to support Canadians across the board. It doesn’t matter if you qualify for regular employment insurance benefits or not, whether you’re self-employed or work for someone else, or what your current financial situation is. If your job and income has been affected by coronavirus, you will have help.
2. What Can I Do with My Current Investment Portfolio?
If you’ve been watching your portfolio since all this madness started, you might be on the verge of panicking. Don’t. In situations like this, things are bound to take a dip, but rest assured that there will be a rebound. There are also a few ways to make up for losses. For non-registered portfolios, you can trigger a “sell and buy” transaction to realize capital loss and help you reduce your upcoming tax payables. We also recommend buying into assets that have been hit particularly hard so you can capture the rebound. Also, for those who are in the position to invest, you can do dollar cost averaging (which is basically a fixed monthly purchase plan) to buy the current dip over time, reducing your risk and also capturing upside potential.
3. Do I Have Emergency Funds Set Up?
If so, great! You’re already a step ahead. Relax, review your funds and see what’s available. If you have investments, you could consider getting a line of credit against the asset. This way, you don’t have to sell at the current low point but you can still have access to cash.
Don't forget there are also many payment deferral programs available to increase immediate cash flow. This includes mortgage deferrals, car lease payment deferrals, insurance premium deferrals, as well as bill credits for BC hydro, to name a few. So if you’re feeling strapped, there are options available to you to help you get through this.
4. Do You Have a Line of Credit?
Speaking of lines of credit, this may be the time to look into tapping into it to pay for immediate expenses. As Vancouver’s insurance advisors, we can help review your budget and determine how long the line of credit will last. We’ll also help you come up with a game plan for how to pay it back later. For those who own a home, you can also look into tapping into your home equity line of credit as an available source of income.
5. Is Your Insurance Annual Premium Payment Coming Due?
Under normal circumstances, many of our clients prefer to pay for their insurance annually. Given the current situation and how you’ve been affected, that might not be the best option. If you currently pay annually and your premium is coming due, we can help you change to monthly payments to reduce your immediate cash outflow.
6. Does Your Insurance Policy Come with Built-in Cash Value?
All insurance plans are a little bit different and the details for how cash value accumulates varies depending on your policy. But if there’s built-in cash value, this could be the right time to utilize that money. Ask us how to tap into it.
7. Does Your Insurance Plan Pay You If/When You are Hospitalized Due to Accidents or Illness?
Fortunately, this includes hospitalization due to COVID-19, so if you’ve had the virus and required medical attention, you could be covered. If not, this may be the time to consider adding on this option. It’s a cost effective solution and can provide peace of mind until life returns to normal.
8. Do You Have a Proper Disability Plan?
If you become seriously injured or ill, it can take a long time to recover and return to work. Your disability plan will provide you with monthly income so you can focus on what matters: your recovery. Let your disability plan take care of the rest.
We’re all adjusting to a new normal and there are enough stressful things happening in the world right now. Your finances don’t have to be one of them. Want to talk to Vancouver’s insurance advisors about your options? Connect with Prometheus Private Advisory Group today.