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What is Life Insurance?
By purchasing insurance, you provide financial security to your family should you die prematurely. In the event of your death, your life insurance will be paid out to your family, easing the financial burden that may be put on them without insurance. This is especially beneficial for families with young children, or a family in which the insured individual is the main provider.
Benefits of Life Insurance
Most people know that life insurance is designed to help their family in the event of their untimely passing. If you die unexpectedly, your family gets a certain amount of money determined by how much coverage you are willing to pay for, and you get the reassurance that they will have some sort of financial backup should the worst happen to you. Some people may receive smaller amounts available through their workplace, but a larger coverage can help to replace potential lost income, paying off a mortgage or other debts, providing enough for a college fund, or other obligations smaller policies won’t be able to cover.
Different policies or types of life insurance also have unique benefits among them. Term life insurance, for example, is typically a lower-cost and simpler product that is flexible to your needs. Depending on the plan, some term life insurance policies can also convert into whole life insurance if you wish to do so, or you can also choose to walk away from the plan with no penalty to you, other than the premiums you have already paid into it. Whole life insurance, on the other hand, is permanent and contains a cash value element that can be borrowed or taken out of the policy, and also provides additional tax benefits.
There are also ways that you can benefit more from your life insurance, as you can find better rates if you fall into certain categories. For example, younger customers tend to have lower rates because of their longer life expectancy, higher likelihood of being healthy, and having a greater chance of paying premiums for many years.
Our dedicated insurance agents are always ready to help you find the policy that is right for you. Give us a call today to talk to our experts about our many available options, and we can get to work finding the right benefits for you!
Why is Life Insurance important?
Why is Life Insurance important?
Life insurance is important for a number of reasons. With life insurance, you can provide yourself as well as provide your family with security and peace of mind, and you can also ensure your family is not in debt should anything happen to you. The advantages of life insurance are as follows:
Life insurance allows you and your family to maintain a comfortable lifestyle that is free of worry or the fear of being financially crippled.
Life insurance, if paid out, can help to pay off existing debts, such as a mortgage or student loans.
Life insurance can pay for funeral expenses.
Life insurance can allow you to leave a family legacy or some money for charity.
Life insurance allows for tax-efficient estate planning.
Life insurance is something that everyone should consider investing in. You care about your family and you want to be comforted knowing that they will not be burdened by any financial issues in the event that you die prematurely. With Dropdead Life Insurance, getting life insurance is made easy, so that you and your family can start living more comfortably with as little hassle as possible.
- Income Replacement
- Children’s Needs
Ensure your family can stay in your home in the event of your death. Don’t leave a mortgage behind. Purchasing individual life insurance is the best protection you can have. Already have coverage at the bank? Ask if it’s level and portable. If not, Dropdead is for you! A mortgage of $300,000 may have a monthly payment of between $1500-$1750/month. A 30 year old female can be covered for as little as $13/month. That’s one lunch per month!
One of the most important reasons to purchase life insurance. If your dependents are counting on your income, what happens when that income stops? How would regular expenses get paid for? A good rule of thumb is 5-10x your take home income. For only pennies a day, you can replace years-worth of income. Remember, life insurance is not for you. It’s for the people you leave behind. Keep them in the lifestyle they are accustomed to.
If you died, would your spouse take time away with the kids? Would childcare costs go up? Would you want to ensure their education funding was never in question? Raising a child is never cheap. When life insurance planning, account for the ongoing costs of raising a family and ensuring their prosperity.
How much coverage do I need?
There is no right or wrong answer to this question, it all depends on what you value in your life insurance policy. The more you add, the more coverage you get, but the higher cost it would be. An agent would look at your assets, debts, financial goals, and individual situation to build a package that they believe would suit you the best. Plans also tend to change over your lifetime, and things like having a baby or getting married can alter what you might want in a plan. That’s why plans tend to be flexible, and you can usually add or remove items you don’t need on most plans to adjust your premiums and your benefits.
When deciding how much coverage you need, think about things such as burial costs, the cost of maintaining your family’s standard of living, and any expenses or debts that would be left behind after loss of life.
On average, most Canadians choose around $500,000 in coverage: Stats by CLHIA.
How long should I be covered for?
When deciding how long you should be covered for (i.e. the terms of your policy), it helps to think about the length of your biggest financial obligations.
For most Canadians, this is their mortgage. As an example, if you had 17 years remaining on your mortgage, we would recommend 20-year coverage.
Do I really need life insurance if I’m young and single?
It may be too early for you if you have no dependents, but if marriage, kids, or buying a home is in your near future, you may want to consider it. Any time you introduce large financial responsibility or dependents into your life, life insurance will help those taking over your responsibility to pay them off, or give them a bit more security when they lose your financial assistance. Starting early is also a good idea, as younger and healthier people will have inexpensive premiums.
Will my policy completely cover my funeral?
If that is important to you, yes. Agents can work with you to develop a plan that works best for you, and one of the plan options you can include is to cover funeral costs. It’s always a good idea to sit down with your agent to go over your options in detail and find what really matters most to you in your plan.