Life Insurance Canada & Reasons to Get Covered NOW
If you’re looking for Life Insurance Canada, congratulations! You are ahead of the pack.
It means you’re considering what many want to overlook…
…what happens to your family if your paycheck suddenly evaporates.
Death is one of those things that none of us want to think about.
The finality of it all is tough to deal with and frankly, there are more exciting things to do.
That being said, there is no greater gift you can give your family than to plan for your final expenses. So if you’re googling Life Insurance Canada I’m going to give 7 reasons to buy a policy today.
Who Am I & Why You Should Listen to Me!
My name is James Heidebrecht and I am a Dad – step Dad and husband. In a nutshell, I have a lot of responsibilities.
Recently I became the main breadwinner. My wife has always had a thriving career but she is currently helping me further my business…
…so my paycheck has become even more invaluable.
If I suddenly die what happens to my kids and wife? Will they be able to hold on the house or will they have to sell it because it’s too costly to maintain?
Living in Toronto the answer is clear. They would have to sell. My wife would get a job immediately and even then our plans would go to hell in a handbasket.
But that won’t happen!
Why? Because my wife and I both have great life insurance coverage.
Our policies take a lot of pressure off. If one of us doesn’t come home one day our kiddos are financially set. Sure this won’t take away the sting of death but it sure makes the logistics a hell of a lot easier.
This is why that search for life insurance Canada is so very important. If you have debt and dependents you really need coverage.
Life Insurance Canada: 7 Reasons You Need Coverage TODAY
You Have Debt & Dependents
This is the top reason most people search for Life Insurance Canada – income replacement.
The thing is if you have debt it doesn’t disappear when you die. It attaches to your estate and the people you owe money to get paid off before your loved ones see a dime.
Hey if you’re a savvy financial planner well then this is not a big deal. Maybe you have substantial savings to take care of a worst-case scenario…
…but most of us aren’t in this space. AT ALL!
In fact, even if we have savings it is quickly devoured and bills start to pile up in no time. The best way to avoid this situation?
Life insurance. Term products allow you to take out substantial face amounts (the value of the policy $100K, $500K, etc) for the period of time you’re most vulnerable (or the term 10, 20, 30 years).
The best news? It’s super affordable especially if you buy coverage when you are young and healthy. So if you’re getting married, having a baby or buying a family home, check out some rates now!
Sample Rates for Healthy Men & Women in Their 30's &
|30 Year Old Male||$26.75||$46.00|
|30 Year Old Female||$20.61||$34.50|
|40 Year Old Male||$51.45||$86.38|
|40 Year Old Female||$36.87||$64.39|
*Quotes above are for RBC Term 30, monthly, Standard Health Class, non-smoker. Your rates may differ depending on your unique circumstances. January 2020.
Wow! As you can see the rates are very fair. Especially if you weigh them against the daily $5 latte you get from Starbucks.
If you’re super healthy they may even be more affordable. I typically use standard rates to give you a realistic idea of how much your premiums are really going to be.
Most people are rated standard, although you may get better rates is you are in terrific shape and don’t have a family history of serious illness.
A Child with Special Needs
If you have a child with special needs you know just how important planning is. You may be Googling Life Insurance Canada to see how you can use it to help provide funds after your death.
I think this is one of the scariest things to consider for any parent – but it’s even worse for those that have children with needs that WILL continue after your death.
How can you provide for someone if you are no longer here?
Trusts provide a vehicle for you to achieve these goals. They are complicated instruments and should be approached with care. It’s possible to set up a trust for your disabled child that will be funded by life insurance proceeds when you pass away. Be sure to work with a financial planner or lawyer that specializes in this area to make sure everything is set up IMPECCABLY!
Please note – for most people most of the time we recommend term coverage. It’s incredibly affordable and covers you during your most vulnerable periods. However…when it comes to trusts for a dependent child with special needs, permanent insurance is the only way to go.
Special Needs Trusts, also known as supplemental needs trusts, can be incorporated into your estate plan to hold any funds or property you want to leave to your disabled child without jeopardizing your child’s public assistance benefits. The are discretionary spendthrift trusts [which means the beneficiary’s creditors can’t reach the trust assets] intended to supplement, but not replace, any public benefits the trust beneficiary receives such as SSI, Medicaid & other governmental programs.
When to use Permanent Life Insurance
Term does NOT work to fund trust. You need permanent coverage – which guarantees a payout to your beneficiary(ies).
Permanent life insurance works similarly to term in that you select a coverage amount and period you want to make payments. However, there are some big differences. Permanent coverage typically has a cash value accumulation feature AND a guaranteed payout.
Because the life insurance company knows it will be cutting a check to your loved one guaranteed, this type of coverage is MUCH more expensive.
If you think permanent life insurance is the product for you to be sure to contact an independent life insurance agent. There are MANY different approaches and it’s not a decision you should consider lightly.
Unfortunately, there are unscrupulous agents that push permanent products because the commissions are juicy – and sadly many clients end up losing cash when they bail on unaffordable premiums.
Huh? Yep if you are looking for Life Insurance Canada, maybe you’re covering a student loan and want some protection…
…just in case something happens.
A lot of parents help their children co-sign debt for continued education with the understanding that their child will take care of the balance when they get a job.
But what happens if the child dies? The debt doesn’t vanish – this is why a lot of parents taking on this sort of responsibility get life insurance coverage to make sure they don’t get stuck with a bill they can’t afford in their later years.
The good news is you can use term coverage to achieve this goal AND this type of life insurance is VERY affordable in your 20’s and 30’s.
To give you an example: a 20 year term policy for a relatively healthy 25 year non-smoking old woman will cost $17.33 per month for $250K of coverage!
Wow now that’s so cheap for what it offers.
To Equalize Inheritances
The world is changing. Divorce used to be the exception – and now it’s increasingly more common. People even jokingly refer to first marriages as “starter” marriages.
This means that the family dynamic is changing too.
Second marriages often result in stepchildren and additional children with new partners, creating a tiered system.
To protect children from getting the short end of the stick, many blended families use life insurance as a tool to avoid inequitable situations.
For example, maybe you’ve earmarked the family cottage for your eldest child but you want to make sure you’re other kiddo doesn’t get the short end of the stick.
You take out a $500K policy to assure a future payout to the child not inheriting the real estate. Of course, you need to use a permanent policy to achieve this goal.
A tool like this is costly so it’s not for everyone.
If you are looking for Life Insurance Canada possibly you own a business. Entrepreneurs use life insurance for a variety of reasons.
- Key Person Insurance: First and foremost, life insurance can be used to cover “key people” in a company. Let’s say you launch a business with some partners and you provide an invaluable service. For example, you are a talented graphic designer that is integral to the online magazine you run. What happens if you die? Will the business collapse? A life insurance policy may assure the continuation of your company and your replacement. It provides your partners with funds to cover the recruitment process and the loss of your skills for a period of time.
- Cover Loans: Life insurance can also be used to cover loans acquired to expand the business. Banks often require applicants for loans to take out a life insurance policy to cover money extended as credit. This protects their interests.
- To Fund a Buy-Sell Agreement: This is an agreement that allows the surviving business owner to purchase the interests of a partner that dies. The policy provides the funds needed for this transaction so the business doesn’t get broken up or end up in the wrong hands. To do this, each partner takes out a policy to guard against their death. Then they execute a buy-sell agreement.
- Create Benefits Packages to Incentivize Employees: Benefits are worth a lot of money. Often businesses create benefits packages to entice top-level people to work for their organization. A good life insurance policy is usually part of this tactic.
To Guarantee Future Insurability
Life insurance for children is one of those topics that has a tendency to polarize people. Some believe it’s a truly despicable thing. A way for insurers to capitalize on people’s love for their kids.
Well, I could not disagree more. In fact, I think this is an opportunity my wife and I missed with my stepson who has ADHD.
If you buy life insurance for your newborn or child you can lock in future insurability for them.
YEP. You heard me right.
There are a few ways you can achieve this goal:
- You can take out a term policy for your kiddo. If you do this it can be renewed or converted to a permanent policy without evidence of insurability. Please read your policy because they aren’t all the same.
- Buy a Child Term Rider when you take out your own coverage. This typically assures insurability to ages 21-25. This allows your 20 something child to buy their own coverage without evidence of insurability.
These options work out really well for people who have a child that are diagnosed with a medical problem or disability that will cause issues for them in the future when it comes to insurability.
NOTE * Ivari is one of a few life insurance companies in Canada who will let you purchase a Term 30 policy for a very small child at very low cost.
This is one of my favourite uses for life insurance. If you are looking for Life Insurance Canada maybe you’re thinking about estate planning.
I think a lot of us avoid these issues until we are older OR have a medical condition crop up.
If I could change one thing, it would be people’s avoidance of the impermanence of life. The best time to do your estate planning is when you are young and healthy.
Life insurance is a fraction of the cost at this juncture AND you have plenty of time to save for your burial and final taxes.
If you are one of those people that waited too long there’s hope.
Small, affordable final expense policies are available for people in their later years even if they have medical issues.
In fact, guaranteed issue makes life insurance coverage available to anyone no matter what their health situation. There is one caveat, however.
The premiums are more expensive and you have to live past the waiting period which is often 2 years. So if you feel death is imminent your beneficiaries won’t get their payout. Typically they just receive the premiums plus interest.
There Are Many MORE Reasons to Google "Life Insurance Canada"
This is by no means an exhaustive list of reasons you may be looking for life insurance Canada. There are so many ways life insurance can be used as a tool.
If you have an estate life insurance can protect your fortunate from excessive taxes, allow you to leave a charitable gift, create trusts OR even set up your own private bank (infinite banking).
To execute strategies such as this you need some really good financial advice and enough cash to fund them.
Permanent life insurance is the vehicle used which means the premiums are costly, but depending on your personal situation. may save you much more than you spend in the long run.
My advice? Give Policy Architects a call today and we can discuss your needs to decide what sort of coverage best suits your circumstances.
Policy Architects for Your Life Insurance Canada Search
Looking for Life Insurance Canada? Well, Policy Architects has you covered.
We are a small boutique life insurance agency that works with people throughout Canada. If you are reading my reviews and posts you know that life insurance is a complicated product.
There are many reasons you need life insurance coverage and even more products that you can choose from.
Remember not all life insurance companies are created equal. Some are more lenient than others for specific medical conditions.
This is why it’s imperative to find a GREAT independent agent to sift through all the options to find the best coverage for your needs.
In the end, this could save you THOUSANDS of dollars AND some BIG headaches.