5 ways to strengthen your business during market volatility

5 ways to strengthen your business during market volatility

Small business owners are often reluctant to spend money or make changes during an economic downturn. However, downturns can be an ideal time to invest in your business and improve day-to-day operations in ways that will have lasting effects.

Every market downturn creates opportunities for innovative business owners. Rather than simply worrying about the situation and hoping things will get better, now is the time to proactively strengthen your operations and position yourself for growth when the economy recovers.

Strengthen relationships

Use this time as an opportunity to reach out to existing customers and ask questions. Reach out to clients you haven’t spoken with in a while and see how they are doing. Such a simple action now can pay off immensely in terms of goodwill and opportunities for referrals once the market improves.

Networking during an economic downturn can be useful to understand how other businesses are coping. See what is working for them or where they require help. You may also discover new opportunities, customers, staff, suppliers and business partners with minimal cost to your business. Consider forming alliances with other businesses and look for opportunities to pair your service or product with something that complements it.

Work with your team

Build morale and motivation by clearly communicating with your team what is happening within the business. Try to involve them in decision-making and finding solutions. This is a great opportunity for you and your staff to enhance your skills. If there’s a course that someone has always wanted to take or if they have always wanted to learn about a different part of the business, this may be a great time for them to undertake additional duties.

Test your contingency plan

As a small business owner, you have ideally planned for market downturns and have strategies in place to activate during times of disruption. Now is an excellent time to review those plans to see what is working and what can be improved upon amid these unprecedented circumstances. 

Review your expenses

Reach out to your bank and negotiate lower interest rates on loans or banking fees. During economic downturns, most banking institutions are more than happy to retain business and help their loyal clients. This isn’t limited to banking. Reach out to vendors that provide you services and see if there are opportunities where you can renegotiate terms or costs. Remember, they are going through the same market conditions you are.

Use the resources available to you

There are many provincial and federal programs available to support you and your business during tough economic times. Take a look at the Government of Canada’s website to see resources available close to where you live.

You’ve worked hard to build your business and create the life you want for yourself and your family and we want to help you protect it. If you have any questions, please feel free to reach out to us.


Lawyers at risk: the case for disability insurance top-ups

Lawyers at risk: the case for disability insurance top-ups

One in four. Those are the odds that you will be disabled due to a serious illness or accident for a period of 90 days or longer at least once before you turn 65.

As a lawyer, the good news is that you likely have disability insurance through your firm’s group coverage. The bad news is that it likely falls far short of your needs.

Protecting your family’s well-being and lifestyle

Lawyers know the value of risk mitigation: it is generally far more cost effective to invest in minimizing risks upfront rather than cleaning up a mess after it happens. No one wants to imagine that they will be in a serious car accident or diagnosed with a debilitating illness. But if you don’t have adequate safeguards in place, the outcome can be devastating if misfortune strikes.

How much does your family spend on average per month? When you include mortgage payments, car payments, schooling, travel and so on, this can add up very quickly. If your family is used to spending, say, $30,000 or $50,000 per month, imagine how your family lifestyle would be impacted if you were suddenly forced to live on $15,000 or $25,000 per month.

If disaster strikes and you’re unable to work, you may have short-term coverage to replace your income for the first 30–60 days, but what about the long term? Although you have savings and investments, how long would these last if you had to rely on them instead of income from your job?

One-size-fits-all won’t meet your unique needs

Long-term disability coverage is often included in group insurance benefits provided by employers, but it typically offers a uniform solution for individuals with diverse circumstances and requirements.

The long-term disability coverage in a group plan generally provides an income replacement percentage – for example, 85%. But here’s the catch: there is often a cap on monthly payments. If the cap is set at $15,000/month, employees at the low end of the firm’s pay scale receive the full 85% income replacement. However, lawyers at the high end of the pay scale see a significantly lower income replacement percentage.

Example: the long-term income replacement gap

Annual earned income ($700,000, or about $360,000 after tax*): $360,000 x 10 years = $3.6 million

Group long-term disability coverage ($15,000/month cap): $180,000 x 10 years = $1.8 million

Potential for lost earnings (i.e. income replacement gap): $1.8 million over 10 years

*Assuming a marginal tax rate of 53.53%

In the example above, the lawyer earning $360,000/year after tax receives long-term disability payments of only $15,000/month. This translates to only 50% income replacement, not the 85% income replacement enjoyed by the firm’s employees at the low end of the pay scale.

Would your family be able to manage on 50% of your current salary? In addition to putting an enormous strain on your family and wiping out many of your plans for the future, living on this much-reduced level of income would likely also make it extremely difficult to save for retirement

Tailoring your coverage with an individual top-up

When your firm’s group coverage doesn’t cut it, you can cross your fingers and drastically reduce your living expenses, or you can supplement your group insurance with an individual top-up. Additional individual long-term disability insurance allows you to customize the coverage to your family’s income needs, not an arbitrary figure determined by the monthly cap of your group coverage.

Beyond ensuring an income replacement level that will allow your family to maintain its standard of living, there are three additional key advantages to an individual top-up:

  1. Non-cancellable. Once you have individual disability insurance, the coverage cannot be cancelled by your insurer unless you stop paying your premiums or decide to terminate the plan.
  2. Portable. Your long-term disability coverage under your group plan is tied to your current employer: if you leave the firm, you generally leave this coverage behind. On the other hand, individual disability insurance will stay with you wherever you go, whether that’s joining a new firm, changing industry or even taking a break from work.
  3. Locked-in premiums. With individual disability insurance, your premiums are locked in at the time when your coverage starts. What you pay depends on numerous factors – including your age, health, occupation, etc. – so the earlier, the better. However, once set, these premiums won’t change, even if your health deteriorates.

Closing the gap, mitigating the risk

An individual top-up is not intended to replace your group disability insurance. Instead, its purpose is to provide supplementary coverage to close the income replacement gap that likely exists under your group plan.

Even the best lawyers cannot predict a car accident or a cancer diagnosis, but it’s not difficult to foresee how your family would struggle if you were unable to work and required to survive on 50% of your current income. By topping up your group coverage with individual disability insurance, you can mitigate this risk.

If you would like to review your current disability coverage and explore your options for a customized top-up, Rubach Wealth can help. Contact us today to start a conversation about protecting your family against an uncertain future.



Disclaimer: This article is provided for informational purposes only and does not constitute any form of legal or tax advice. You should consult your lawyer and/or accountant prior to making decisions related to the topics covered in this article. Rubach Wealth can work with you to facilitate such discussions.

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Putting your needs first: Why group insurance doesn’t cut it

Putting your needs first: Why group insurance doesn’t cut it

Employment contract? Check. Benefits? Check. Group insurance? Check. Do you clearly understand what you are covered for and are all your insurance needs taken care of? Not so fast.

If you have group coverage through your job, it can be tempting to assume that you’re good to go on the insurance front. The reality is that the group insurance benefits offered by employers often fall well short of the level of coverage we require and lack the nuance to meet our personal needs.

In this article, we explore the pitfalls of relying exclusively on group insurance and highlight how often one size doesn’t fit all.


I’m covered, right?

When it comes to your insurance, the devil is in the details. Yes, you have group insurance through your employer, but what does it cover? Perhaps your benefits include a new pair of glasses every couple years, or maybe a few hundred dollars annually for massages and physiotherapy. These perks are nice, but they won’t do you much good if you have a serious illness or accident.

If one day you can’t work due to the loss of a limb, how will you replace your lost income? If you are diagnosed with a chronic illness and need to pay for expensive medication, where will the money come from? And if – knock on wood – you pass away suddenly and unexpectedly, will your surviving family members have the resources to pay off your mortgage?

If your group coverage includes disability, critical illness and life insurance, then you’re off to a good start. But again, it’s the details that matter most and determine the answers to the crucial questions above.

  • Life insurance. When included in a group policy, life insurance often features a death benefit of two times your annual salary. This may sound like a lot, but how long will this amount last if you leave behind a spouse who has to keep paying a mortgage, raise your kids and put them through university? Furthermore, most executives find that their bonus structure constitutes a large part of their compensation, but this bonus may not be part of the calculation of death benefit.
  • Disability insurance. Group disability typically covers 40%–60% of your salary. If you were to become disabled and unable to work, would you be able to manage with only 40%–60% of your current income? How would this impact your family’s lifestyle? Do you understand the definition of disability under your group coverage?
  • Critical illness insurance. Group critical illness insurance is often narrowly defined. This is a problem because more exclusions mean there’s a greater risk that you could receive no insurance money should you become seriously ill. This could force you to go back to work when you should be focusing on recovery.

Ours, not yours

Even if the group coverage through your employer is (currently) generous and ticks all the right boxes in terms of insurance essentials, it still has one major shortcoming: your employer owns the policy, not you.

If you rely solely on your group coverage for disability, critical illness and life insurance, then all your eggs are in one basket. If you lose your job tomorrow – whether you are laid off or resign or the company goes bankrupt – your insurance coverage will disappear along with it.

Sure, you may land another job straight away that also provides generous group insurance, but there is no guarantee. In addition, a pre-existing condition clause may apply. If a lack of individual coverage puts the financial well-being of your family in jeopardy, this becomes a risky situation. Even if you don’t lose your group insurance, your employer can change the coverage and benefits at its discretion as the owner of the policy, potentially leaving you with less security and more uncertainty.

Meeting your needs on your terms

We’re not saying that group insurance is bad to have, but chances are it is not providing you and your family with the financial safety net that you need. From insufficient coverage to the risk of losing it entirely if you lose your job, your group insurance is likely not cutting it.

With individual insurance, you can tailor your coverage to meet your family’s unique needs. If you are the family’s sole breadwinner, an individual disability insurance policy can allow you to lock in benefits covering 100% of your salary, rather than the 40%–60% offered under the group plan.

Another key advantage of individual policies is that they guarantee future insurability. For example, once you have an individual life insurance policy, this coverage is guaranteed for the rest of the life of the policy (usually age 80 or 85 or permanently, depending on the type of policy). This is in stark contrast to your group life coverage, which will disappear as soon as you change or lose your job.


Confidence through clarity

Insurance is one of those things that most of us wish someone else would just take care of for us. That’s why it’s so common for people to think, “Group coverage through work? Great, that’s insurance taken care of.” However, as we’ve illustrated here, adopting this approach can put the financial well-being of you and your family at risk. You owe it to your loved ones to do the right thing.

At Rubach Wealth, we can help you achieve clarity on what you have and what you need so that you can be confident that your family’s financial future is secure. You need to make an informed decision. If you’d like to sit down with us to talk through your situation, give us a call today.

It’s not about ditching your group coverage; it’s about helping you make sense of your current situation and identifying gaps that can be filled with tailored individual coverage. Working well in a group is important in the office, but sometimes your needs must come first.


Disclaimer: This article is provided for informational purposes only and does not constitute any form of legal or tax advice. You should consult your lawyer and/or accountant prior to making decisions related to the topics covered in this article. Rubach Wealth can work with you to facilitate such discussions.

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