Photo by Jessica Rockowitz on Unsplash
It is not easy to talk about life insurance as it not easy to discuss the topic of death.
Yes, someday we are all going to kick the bucket, often leaving behind our creditors as well as our financial dependents. The purpose of life insurance is not to sooth the pain of the loss of a loved one but to provide financial stability in the most difficult times. So think of it as income and expense insurance.
Capitalizing on your fear of death is not our goal – we would like to invite you to simply assess your family’s insurance needs.
Common signs that you need life insurance:
– You are married
– You have young kids or planning to have kids
– You have significant amounts of debt
You do not need life insurance if:
– You have enough wealth and income streams
– No one is reliant on your financial resources
– You have no kids or your kids are independent adults
– Your estate is too small to owe taxes or liquid enough to pay estate taxes
Need or Want?
Now let’s separate the reasons to buy life insurance based on needs and wants.
Meeting your family’s Life Insurance needs allows the surviving family members to carry on unaffected by the financial loss of the loved one. On the other hand, Life insurance wants stand for anything else that would further enhance your financial situation in addition to simply offering protection.
|Life Insurance Needs:||Life Insurance Wants:|
|Final expenses||Build cash value|
|Immediate income replacement||Wealth replacement|
|Payment of debts / mortgages||Charity|
|Education for children||Estate creation|
Term or Perm?
Now that you assessed your needs and wants, what life insurance should you get?
There are two main types of life insurance: Term Life insurance and Permanent Life insurance.
Term policies provide coverage for a set period of time (usually 1, 5, 10, 20, or 30-year period) at very affordable level premium payments. This is a very suitable option for any family that reasonably plans to reach financial independence within a 20 to 30-year period and nearly all of life insurance needs can be addressed with term policies.
Permanent life insurance covers you for the entire life and with an addition of a cash savings vehicle that you can borrow from or receive distributions from with certain tax privileges. There are certain benefits of permanent life insurance that come at a much higher premium rate depending on your age and health status and you might need an insurance professional to help you better understand specific product offerings.
Pretty much all of us will buy life insurance at some point in our lives. It is common knowledge that life insurance premiums on new policies get more expensive as you get older, so it is smart to take care of it now so you can save yourself money in the long run!
At Arbetov Insurance, we offer a great choice of Life Insurance including Term Life, Permanent Life and Universal Life insurance packages from different Canadian insurance providers.
Feel free to contact us to learn more about your life insurance options and get a better understanding of which product would be best suited for your own needs!