The post last week talked about protecting your business, and if you are not a business owner you may have just skipped reading it altogether. This week, this is the post you want to read. Let’s chat about insurance everyone needs – life insurance.
If you have an interest in protecting the people you care about most, those who depend on you, then life insurance can do just that after you have passed. If your family counts on your income for necessities such as food, clothing, and shelter, think about whether or not they could continue to live comfortably without you. Even if you have the basics covered, what about education and retirement planning for those you leave behind? Even a well-planned budget can be derailed with the loss of a loved one. The good news is you can continue to provide for your family long after you’ve gone with the right policy. Here are some basics to get you thinking about what you might need.
Most commonly a combination of life insurance and disability, this coverage is meant to payout the remainder of your mortgage in the event of your death, or make the regular monthly payments should you become disabled. There are a few reasons this is not my first choice:
- The premiums for this can often be more expensive than individual coverage and it only protects the mortgage – nothing else,
- Even though the payout amount decreases as you pay down your mortgage the premium stays the same and coverage ends at age 70,
- Mortgage insurance uses post-claim underwriting. This means no medical at the time of application, instead it can happen after a claim is made. This could disqualify coverage at the insurers discretion.
Term insurance is exactly as it sounds, it covers you for a predetermined amount of time, typically 20-30 years. A few things to note about this coverage:
- It has no residual value, once the term is up you will have gained nothing,
- Premiums will increase should you need to extend the coverage beyond your original term,
- If your health deteriorates significantly within that time you could be denied coverage.
This coverage remains in place until your death and the premium is generally consistent for the life of the policy. Here are the basics:
- The younger and healthier you are when you get it, the lower the premium,
- Some policies have a “reserve” or cash value that can be refunded if you cancel the policy before your death,
- You may be eligible to borrow against this cash value.
What is the right choice for me?
These are just a few ideas to set you on the right path. There are certainly more options and no one solution will be a fit for everyone. Talking to a financial advisor who can factor in all of your life considerations is the best way to determine what makes the most sense for you and your family.
Need a financial advisor? I can help, send me a note and I’ll connect you with one of the smart advisors in my network.
Have More Questions?
Let me know and I’ll do my best to address it here for you and all of our readers. Better yet, contact an InsureMy advisor; these guys know their stuff. Email Info@InsureMy.ca or give them a call locally at (403) 410-1896 or toll free at 1-844-410-1896.
Everyday Insurance With Allie
Working mom, lover of the great outdoors and self-professed know-it-all. Our resident blogger, Allie isn’t the insurance guru she claims to be – but she’s learning and we are happy to help guide her. All the while keeping you in the loop on the “insurancey” stuff you need to know. #AskAllie