• June

    15

    I Don’t Have Life Insurance – Where Do I Start?

    Posted by: daemond | 1 Comment

    Researching the best life insurance in Canada can be tricky.

    So let’s start with some Canadian life insurance definitions: life insurance is a type of insurance that pays money to a beneficiary when somebody (usually a family member) passes away.

    That family member is usually referred to as the “policy holder” since they are the one who purchased the life insurance policy.

    Typically, your first step when thinking about getting life insurance should be a question: why? This is a great starting point because it narrows down the kind of policy that’s right for you.

    There are a number of common reasons for why you should get a life insurance policy:

    1. Income Replacement: If you’re a spouse or a parent and you support a family with your income, life insurance can protect your family from the loss of income in the event of your premature death.

    2. Payment of Debts: If you pass away and hold outstanding debts, life insurance can pay them off after you pass away. Debts can include mortgages, car payments, and credit cards.

    3. Final Expenses: Why you die, there are a number of expenses that need to be covered. Life insurance can take care of these expenses, such as funeral and other administrative expenses.

    4. Education Funding: The death of a parent sometimes means that the education of a child or the quality of that child’s education, is compromised. Insurance can mean giving a child access to  good quality day care or university level education.

    5. Business Continuation: If you own a business, life insurance can help with the transfer of business ownership in the event of your death – this means the insurance can provide the funds necessary to continue the business and cover any losses incurred by your death.

    6. Tax Liability: Life insurance policies can cover tax liabilities in the event of your death. This means that the policy can cover government estate taxes that could otherwise reduce your heirs’ inheritance.

    7. Charitable Giving: Life insurance policies can provide a way for you to make much larger gift donations than you might have thought possible – plus, if you name a charity as the beneficiary of a plan, your annual or monthly premiums are deemed as charitable donations and qualify for tax receipts.

    8. Equalizing Inheritance: Life insurance can help provide funds to ensure each child receives an equal share of their parents’ assets.

    As you can see, purchasing the right kind of life insurance can be complicated, especially when you consider that everybody’s needs are different, and these needs will change as you experience changes in your life like marriage, divorce, the birth of a child, retirement, the purchase of a house, etc

    But for the purposes of getting started and keeping things simple, once you understand the “why,” the next question is always “how much?”

    A good life insurance calculator like this one can help estimate what stage you’re at in life, what your cash needs are, how much you’ll pay into your policy, and how much you’ll receive out of your policy.

    There are many life insurance calculators online – just make sure you’re using one from a Canadian source, since American life insurance calculators will give you inaccurate results.

    Of course, once you’ve read and researched enough online, the next best step is to talk to a life insurance advisor or broker, and to shop around and compare policies.

    We know that researching life insurance online can be overwhelming, so another great starting point would be to email us here at Bravia Life.

    We’d be more than happy to help point you in the right direction.