A few reasons why you need life insurance

November 3, 2015

Retirement planning is a complex and somewhat overwhelming prospect for many Canadians. Trying to plan for the future while living in the here and now can be difficult, but life insurance is important.

A few reasons why you need life insurance

Family matters

Life insurance is an often neglected part of retirement planning. While safeguarding the well-being of your family in the event of your untimely death is the most well known reason for buying life insurance, there are a number of other lesser-known benefits.

  • Stop and think:  what would happen to your loved ones if you died tomorrow? While this is a maudlin thought, it is an important one.
  • Countless people die everyday due to disease, accident and other factors. Have you taken the steps necessary to protect your family? Life insurance offers a simple way to guarantee that your family won't suffer financially if your paycheck stopped coming tomorrow.
  • Life insurance companies uses factors like age, income and earning potential to place a specific value on plan. As long as you pay the fixed premium every year, your survivors receive the full amount after they die.
  • No amount of money can mitigate the loss of a love one, but it can spare additional pain and suffering along with tax relief.

Cold hard cash

If you opt for whole life insurance, there are additional benefits.

  • In addition to the "transfer of risk" element, which yields the aforementioned death benefits, whole insurance policies also have an investment component.
  • These funds not only accumulate, but can be borrowed against at any time without penalty.
  • Whether you're planning the vacation of a lifetime or need extra cash for the down payment on that beach cottage, life insurance can help you reach your goals.
  • Even better -- these funds are considered a "hard" asset and can therefore be used as collateral. This structured savings approach is also beneficial to people who struggle with putting money away. With life insurance, it's automatically invested on your behalf.

Insurability for life

Many people's insurability changes with changes in health conditions.

  • With a whole life insurance policy, your status never changes as long as you pay the premium. Your payoff is fixed and guaranteed.
  • In rare cases, it may be necessary to stop paying the premium. In the event that this happens, you can cash out the current value or roll your funds over into a different insurance account.
  • As you plan for your golden years, you likely have many factors to consider. Savvy investors will put whole life insurance at the top of the list.

Although it is not something many of us want to think about, getting life insurance and planning for what happens to your family after you are gone is an important responsibility for anyone with a family. Look into getting a life insurance policy to help your family.

The material on this website is provided for entertainment, informational and educational purposes only and should never act as a substitute to the advice of an applicable professional. Use of this website is subject to our terms of use and privacy policy.
Close menu