Most people insure their phone, their car, and their home. But when it comes to insuring their income or their life, things suddenly feel more complicated.
How much is enough?
Is it too much?
Am I overpaying?
Do I even need it?
Insurance can feel abstract, especially when nothing has gone wrong. But at its core, insurance isn’t about expecting something bad to happen. It’s about protecting the life you’re building, and the people connected to it.
Start With One Question
Instead of beginning with numbers, ask yourself:
If something unexpected happened to you today, who would be financially affected?
Insurance isn’t about you, it’s about the people and responsibilities tied to you, your partner, your children, your business, your mortgage. Once you frame it that way, the “how much” question becomes much clearer.
Life Insurance: Replacing Income & Protecting Plans
Life insurance is often the first type people think about, and for good reason.
You may want life insurance if:
- Someone depends on your income
- You have a mortgage
- You have young children
- You want to cover final expenses
- You want to leave something behind
But rather than picking an arbitrary multiple of your salary, a more thoughtful approach looks at:
- Outstanding debts (mortgage, loans, lines of credit)
- Future education costs
- Ongoing household expenses
- Existing savings and investments
- Your partner’s earning capacity
For some families, the number may be higher than expected. For others, it may be lower. The goal isn’t to maximize coverage, it’s to ensure your family won't face financial stress during an already emotional time.
Critical Illness Insurance: Protecting Against “Survival Risk”
Life insurance protects your family if you pass away. Critical illness insurance protects your lifestyle if you survive. The distinction between the two matters.
Serious illnesses such as cancer, heart attack, or stroke don’t just affect health, they often affect income, routine, and stability. Recovery may involve time off work, travel for treatment, or additional support at home.
Critical illness policies typically provide a tax-free lump sum if you’re diagnosed with a covered condition. That money can be used however you need, whether that’s covering household expenses, paying down debt, accessing private care, or simply creating breathing room.
Ask yourself:
- Could you comfortably take 6–12 months off work if needed?
- Would your emergency fund absorb that impact?
- Would your partner need to stop working to support you?
Critical illness insurance isn’t about assuming the worst, it’s about recognizing that recovery often requires financial flexibility.
Disability Insurance: Protecting Your Paycheque
If there’s one type of coverage that’s often overlooked, it’s disability insurance. Statistically, working adults are more likely to experience a disability lasting several months than to pass away prematurely. Your income is your largest financial asset. It funds your home, savings, investments, and lifestyle. Protecting it is often more practical than protecting anything else. Disability insurance replaces a portion of your income if you’re unable to work due to illness or injury.
Many people have some coverage through their employer, which is a great starting point. However, employer plans may not cover bonuses or commissions, and they typically don’t follow you if you change jobs. Again, this isn’t about fear. It’s about recognizing the real value of your earning ability and protecting it appropriately.
So… How Much Do You Actually Need?
There isn’t a universal number.
Instead of focusing on a specific dollar amount, consider these guiding questions:
- What would happen to your household income tomorrow if you couldn’t work?
- How long would your savings realistically last?
- Do you have employer coverage? If so, how much?
- Is your partner financially independent?
- Are your children still dependent on you?
- Do you have debt that would become burdensome?
Insurance isn’t about stacking policies. It’s about identifying gaps. And sometimes, after reviewing everything, you may realize you need less coverage than you thought, not more.
Insurance Should Evolve With Your Life
As your life changes, so should coverage. Your insurance needs at 28 are different from your needs at 38 or 58.
Major milestones often signal it’s time to review:
- Buying a home
- Having a child
- Starting a business
- Paying off your mortgage
- Receiving an inheritance
- Approaching retirement
Some people discover they’re underinsured. Others discover they’re overinsured. The point isn’t to constantly increase coverage. It’s to ensure your protection still aligns with your current reality.
A Final Thought
Insurance isn’t the most exciting part of financial planning, but it is one of the most stabilizing.
When structured properly, it does three things:
- Protects your family’s lifestyle
- Protects your long-term plan
- Gives you peace of mind
And peace of mind is underrated. The right amount of insurance isn’t a scary number. It’s a thoughtful one.
If you haven’t reviewed your coverage in a few years, it may be worth asking:
- Has my income changed?
- Has my debt changed?
- Has my family situation changed?
- Do I fully understand what I already have?
Sometimes the most responsible financial move isn’t investing more. It’s protecting what you’ve already built.
At Alpen Investment Advisors, we believe financial planning isn’t just about growth, it’s about stability, protection, and thoughtful preparation. If you’d like to review your coverage or simply understand what you currently have in place, we’re here to help you align your protection with your goals, calmly, clearly, and without pressure.
Whether you're a current client or someone looking to take the next step toward financial success, Alpen Investment Advisors is here to guide you every step of the way. Based in North Vancouver, our team, led by Jon Alpen, brings over 20 years of experience in helping clients grow, preserve, and navigate their wealth. With expert guidance, tailored solutions, and a steadfast commitment to your success, we are dedicated to supporting your unique financial journey.
Reach out to us today at jonathan@alpenia.ca to start or continue building your financial future with confidence and clarity.
