Why Buy Life Insurance? Peace of Mind Through Life Insurance
Life Insurance is about knowing that you and your loved ones are taken care of in the event of an unexpected tragedy.
Do you live in Canada and have never owned Life Insurance? You’re not alone – yet the consensus among financial planners is clear: buying Life Insurance could be one of the most important investments for you and your family’s future. Life Insurance provides Canadians with an opportunity to manage their risk, ensuring that those who are left behind are financially secure when something happens to us – whether it’s unfortunate illness or death. While purchasing a policy can seem overwhelming at first, understanding the basics of Life Insurance can help make it easier to choose an option that best fits your needs. In this blog post, we’ll discuss why owning life insurance is vital for Canadian households and how you can go about finding a suitable insurer for your unique needs.
You won’t get a single answer, but several reasons for buying Life Insurance crop up repeatedly, and coincide with three big life-event triggers:
1. Marriage or life partnership:
If you die, you want to financially protect your spouse or partner.
When a person dies, their family must deal with the financial burden as well as the emotional impact of that loss. Fortunately, Life Insurance can help protect your loved ones from unnecessary financial hardship and reduce their stress during an already difficult time.
It can be a great financial tool no matter your relationship status, but life insurance is particularly critical if you have dependents such as a spouse and/or kids who rely on your income. A young family who carries debt and has children may be concerned with the impact of the loss of one of the parents.
The surviving parent may need money to cover debt or afford ongoing expenses for the family – housing costs, monthly bills and groceries, to name a few.
If you’re employed by a company that offers a group insurance plan, your needs may already be fully or partially covered. Those without employer benefits typically need to seek coverage themselves, and self-employed individuals face specific challenges.
2. Birth of a child or adoption:
You now have a family and want to help protect your child’s future and your family.
3. Purchase of a home:
Long-term mortgage commitment and home maintenance further increase the stakes. You want to help provide for your family the best you can, should you no longer be there. Life Insurance can pay off the balance of your mortgage in the event of your death. This may make it possible for your spouse or family to stay in their current home despite the loss of your income – something that’s important to a lot of parents.
Life Insurance can also help pay off outstanding loans, lines of credit or other consumer debt, as well as funeral costs and burial expenses. Ideally, your policy’s death benefit will be large enough for your family to maintain their current lifestyle (or at least a similar one) without your income.
So, the “why” now becomes clearer.
With enough Life Insurance, you can be more confident that your family can:
- Pay for funeral and associated expenses.
- Replace all or some of your salary.
- Pay off all or some of the mortgage.
- Have a nest egg, to help carry on a safety net.
- Pay taxes on your estate.
Mind the gap:
Canadians who are non- or under-insured
While most Canadians have Life Insurance, a surprising one-third don’t – or don’t have enough. Why?
Too busy:
It’s one of those decisions that simply fall through the cracks because you’re too busy or think it’s too complicated. If you call me today, I can help you make the whole process simple and you get the peace of mind that you have the Life Insurance coverage you wish and need.
Health or medical issues:
You suspect your medical history might prevent you from getting coverage.
I have answers to these questions and I can get you Life Insurance with no needles or medical exam in some situations. Let’s chat today.
Call to Glenn Stewart Life and Health Insurance Broker Kitchener
at 519-896-9970
Too expensive:
You also suspect it’s too expensive, especially if you have medical issues.
Here are a couple of examples:
- A male person aged 30 and a non-smoker can obtain $500,000 Term Life Insurance for $30 monthly.
- A male person aged 40 and a non-smoker can obtain $500,000 Term Life Insurance for $45 monthly.
Age
30
40
Insurance
$500,000
$500,000
Monthly cost
$30
$45
Haven’t kept pace:
Your income and lifestyle have increased over time, but your Life Insurance hasn’t kept pace.
Now is the time to review and update your coverage and to make sure the beneficiary is still correct for you.
Group Life Insurance stopped:
You had coverage through work, but a career change, retirement or loss of job now leaves you and your family unprotected. Having personal Life Insurance is better because you control the type, amount and premium.
In several other situations, Life Insurance is very useful and effective.
The transfer of wealth to the next generation
Do you want to leave your kids or grandkids an inheritance? A Life Insurance policy can be a tax-efficient way of doing that.
Someone nearing retirement may have no debts, and their children may be grown and no longer dependent, but they have the goal of passing wealth to the next generation. Adding that Life insurance can help transfer their wealth.
This typically involves purchasing Whole Life Insurance, (a form of permanent Life Insurance) and making your children or grandchildren the beneficiaries. Unlike term Life insurance, which only offers coverage for a set period of time, Whole Life Insurance guarantees an end-of-life payout. The death benefit is non-taxable, so your beneficiaries won’t pay income tax on the money they receive.
You want to make a philanthropic impact.
A lesser-known function of Life Insurance is that it can be used to efficiently transfer funds to a non-profit organization. Some individuals have a particular charity they are very passionate about, and they want to leave a legacy that has a positive impact on others.
By naming a charity as a beneficiary of your Life Insurance policy, the money passes tax-free from the Insurance company to the charity. And unlike when making a charitable donation through your will, the payment avoids probate and bypasses your estate, so it cannot be contested by family members or other beneficiaries.
Call to Glenn Stewart Life and Health Insurance Broker Kitchener
at 519-896-9970