In life we can never take for granted that the things and people we love, enjoy, and rely on today will always be around. It is important to protect yourself and your family against unforeseen challenges with the proper type and amount of Life Insurance.
Life insurance pays a Lump Sum Tax Free payment to your beneficiary upon your death. It is especially important for people with dependents such as a spouse and/or children in addition to those who have any outstanding debt.
A proper life insurance plan can mean the difference between leaving your loved ones well-positioned financially and leaving them to cope with debts and an inadequate income.
Should you pass away prematurely, life insurance will ensure that:
- Your family has the financial means to maintain their standard of living
- Your spouse/partner will not have to worry about replacing your lost income with a second job in order to be able to pay for continuing expenses such as a mortgage, car expenses, and all other living expenses
- Your final expenses will be paid for (these can range from $10,000 - $25,000 and can be an added stress during a very emotional time to your surviving family)
- Your debts are paid off so they are not passed along to your family
Life insurance can also be used to:
- Leave a legacy to your favourite charity
- Build tax-advantaged savings you can draw upon as needed for personal or business opportunities while you are sill living
- Supplement your retirement income or provide for long-term care or home care for yourself or a family member
The younger you are the more affordable life insurance premiums will be. Talk to us now to lock in your rates and ensure your family is properly protected today and for the future.
Life insurance premiums are paid monthly and keep the policy in force. If premiums go unpaid for a pre-determined amount of time, the policy will lapse and your insurance will be forfeited.
Term Insurance
Term life insurance is a short term life insurance contract often for a period of 10, 20, or 30 years. If you pass away during the time period in which the contract is in place then your beneficiary receives the payment. If you outlive the contract, then no payment will be made.
It is best-suited to meet high; short-term protection needs at the most affordable initial cost. For example, a couple with young children and a mortgage would most likely choose term life insurance as an affordable way to get the full coverage they need today.
The benefits of Term Life Insurance are:
- Low cost
- Temporary protection for times of high financial risk (e.g. when you have a mortgage)
Term life insurance coverage is a very appropriate way of meeting immediate short term needs for the lowest cost. Most term insurance policies provide the option to convert to permanent life insurance once your insurance need is stabilized without providing proof of health. The premium cost however, will be subject to your age at the time of conversion.
Permanent Insurance
Permanent insurance is exactly what it means, it’s permanent. It is a life insurance contract that is in place for the length of your life and upon your death your beneficiary receives the tax-free payment. Owning a permanent policy is similar to owning your home. Over time, your policy will build equity within the insurance contract known as the ‘cash value’. The cash value can be accessed upon cancellation after a designated time period.
It is best suited for people who are willing to pay a higher initial premium for greater long term savings and guarantees.
The benefits of Permanent Life Insurance are:
- Guaranteed Premium
- Guaranteed Cash Value
- Guaranteed Death Benefit
Universal Life
Universal life insurance provides permanent life insurance protection with a tax-sheltered investment component. As cash values accumulate, they can be used to pay part or all of the cost of your insurance. Universal Life is the most complicated form of life insurance as there are many options to choose from in regard to all aspects of the contract (cost of insurance, premium amount, investment options, death benefit, etc). It is best to speak to an advisor to properly understand how UL policies work.
The benefits of Universal Life Insurance are most appropriate for:
- People who have maximized their RRSP contributions
- Parents and grandparents who want to maximize their estate for their children and grandchildren
- Business owners looking for a tax-efficient way to protect the value of their business