When we talk about life insurance, it is not a pleasant topic. Life insurance means you are discussing a possible future where you or your significant other is no longer around. Unfortunately, even if we do not want to think about it, it is still a possibility that needs planning.
A BMO survey found that around half of Canadians worry their family would no longer be financially stable if they were to die unexpectantly. Twenty-six percent were quite concerned for their family. But a little less than half of those surveyed said they do not own life insurance or do not plan on purchasing any within the next year. Roughly 24 percent of the millennials (ages 18 – 34) surveyed have no coverage whatsoever.
So if families are worried about financial stability in the case of a death, why do so many not have coverage? Many reasons are that life insurance is too expensive, their job provides it for them or that they are young and have no dependents. However, life insurance is something for anyone at any age.
Here are a few reasons why life insurance is a conversation to have and to get yourself a policy right away.
Prepare for the Unexpected
Life insurance is a way to protect your family in case of your sudden death. Even if you do not have children and are single, if you have debt, someone will have to pay it. Fresh out of college with a substantial student loan? If you were to die unexpectantly, it might be your parents footing the bill for that loan.
So by purchasing a life insurance policy, you are covering any costs related to your death that would fall into the hands of your family. Instead, whoever you name as your beneficiary, they receive the death benefit. That money can then be used to pay any outstanding debt left behind.
Use as an Investment
Certain life insurance policies have an investment side to them. With a permanent insurance policy, there is a portion that is called cash value. Think of it like a savings account for your policy. A portion of the premiums you pay each month goes towards the cash value. You can actually borrow against the cash value and retrieve that money. However, when you tax that money, it reduces the death benefit your beneficiary would receive should you pass away.
Best to Purchase Right Away
You won’t be any younger tomorrow so now is the time to consider life insurance. Factors like your age, lifestyle and wellbeing influence your premium payments. Chances are when you are young, you are at your healthiest. That will mean cheaper monthly premiums.
Consider a term life insurance policy. You buy for a designated period. Once that period comes to an end, the plan either expires, or you renew it.
If you have already purchased it, make sure your life insurance is up-to-date. The last thing you want to hear is the policy expired or is no longer valid after the death occurred. Life insurance is a way to financially free your loved ones during a time of mourning. Protect their future in case you are no longer around.