Make up the difference in your portfolio

Tired of reading the doom and gloom headlines leading up to the announcement of a recession and hearing the stories of our friend's grandma who lost half her life savings and now has to eat porridge three meals a day? We're told to keep holding on to the investments we have because selling them would crystalize our losses. Some people are borrowing money to buy stocks at lower values, further leveraging themselves.

Despite the slight rebound we've had, we still have a ways to go. What can be done to make up the shortfall? To earn the money back, you'll need to play smart by reevaluating your investor profile and researching those companies before you buy their shares. In the meantime, if you think there's a possibility you may need this money before the value is back to what it was last summer, you'll need to plan to make up the difference somehow.

Why would you need to draw from, or the full amount of, your portfolio?
* You are leaving it to a beneficiary
* In case of disability
* In case of critical illness

If any of the above happened and your portfolio's down 35%, do you want to start taking money out of it? Unlikely, but you will if you need to. Depending on what your top priority is, you can insure against it. For seniors who hope to leave their full portfolios to grandchildren, they can insure themselves for the difference. For self-employed people who should have disability insurance, they can estimate their basic living costs and insure that. For everyone else who would only tap into their RRSPs if they were critically ill, critical illness insurance can make up that difference.

34 yr old male, smoker, $30,000 life insurance for 10 years = about $10.50/month (female smoker = $9.30)
64 yr old female, non-smoker, $50,000 for 10 years = about $35/month

34 yr old male, non-smoker, $50,000 critical illness for 10 years = about $18/month

33 yr old female, non-smoker, $1200/month disability benefit = about $33/month (male = $26.50)

Is it worth the $35 or less per month to protect your investments? It's up to you.