Personal Finance

Have you provided for potential life-changing events?
By Gail Bebee | 13/06/11

Now that income-tax season is a distant memory, we can all pursue some of the more pleasant aspects of life such as how to spend our summer vacations. Will you be white-water rafting, bungee jumping or hang gliding? Eco-vacationing in the tropical rainforests of Central America? Photographing lions, elephants and giraffes in Africa? Perhaps your ideal holiday is something less ambitious, such as lounging at the cottage.

About the Author
Gail Bebee is an independent personal finance speaker, teacher and the author of No Hype--The Straight Goods on Investing Your Money. She can be reached at gbebee@gailbebee.com; her website is www.gailbebee.com.

No matter the type of escape from your daily grind, there is a critical aspect of vacation planning that many of us neglect in the rush to get away: what happens if something goes wrong. The reality is that virtually all vacation pursuits involve some risk to life and limb, be it a car accident, sports injury, a medical emergency such as a heart attack or, the unthinkable, a fatality. Given this reality, there are a few life-planning essentials you'll want to have in place before leaving town.

If you plan to vacation internationally, supplementary travel medical insurance is a must. For example, as the Ontario Ministry of Health and Long-Term Care warns on its web site, residents are entitled to "very limited funding for a limited range of medical services" when travelling outside Canada. For this reason, the ministry strongly advises travellers to purchase additional health insurance before leaving the country.

Your employee-benefit package may include travel medical insurance. Otherwise, such insurance should be available from your local travel agent or insurance broker. For someone under 30 who is covered by a provincial health plan, the annual cost for unlimited nine-day trips of up to 183 days in total can be less than $50. (Prices increase with age.)

As with all insurance, it's important to understand what you are buying. Typically, policy holders are instructed to call a toll-free number before seeking medical treatment while outside the country. Adventure-sport enthusiasts take note: certain activities such as rock climbing, mountain climbing and motor racing may be excluded from standard policies.

If you were injured on vacation and required time off work to recover, who would pay the bills until you returned to work, or if you were left permanently disabled? Short- and long-term disability insurance can fulfill this role by providing a steady income in such potentially financially disastrous situations.

For those in the work force, this insurance, like the aforementioned medical insurance, is a must. Again, you may be covered under your employee-benefits package. Professional, union and trade-association members may be able to buy disability insurance as part of a group benefit plan. Individuals needing this coverage should contact a qualified life and health insurance agent.

What would happen if a vacation accident left you unable to make decisions for yourself? Who would sign the consent form for your medical treatment? Who would take care of your personal finances? Who would make the basic decisions of daily living such as what food you will eat?

You can give someone you know and trust the legal authority to make such decisions if you are no longer able, by preparing a legal document known as a power of attorney.

Typically, you'll need a power of attorney for personal care (health and medical care, housing, food and clothing) and one for financial decisions. This is an area of provincial jurisdiction, so terms and details vary by province. While do-it-yourself power of attorney kits and sample forms are only a Google search away, consulting a legal professional will ensure that the person you choose will act on your behalf in such circumstances. If you don't take the time to prepare these documents, the government will decide who makes these decisions for you.

We generally avoid the unpleasant thought of dying on vacation. But what if it happened to you? How would your personal possessions be distributed? Who would care for your children if both you and your spouse died in an accident? If you have an up-to-date, properly prepared will, your wishes will be respected.

Without a will, the provincial government and courts where you live decides these things. This could be catastrophic for those you leave behind. For example, your spouse would get only a government-defined portion of your estate with the rest left to your children even if your spouse desperately needed all the estate's assets to meet basic living needs.

Do-it-yourself will kits and web sites offering step-by-step will preparation are widely available. However, seeking the assistance of a legal professional knowledgeable in wills and estate planning is worth the price to ensure that your wishes are respected after you depart.

Before going on summer vacation this year, resolve to have the appropriate travel medical insurance, disability insurance, powers of attorney and will in place. You'll enjoy your vacation even more. And, if the unexpected does happen, you'll be glad you did.

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