Written by Meila McKitty Plummer, B.sc, LUTCF, FSS
Financial Services Specialist
Let’s Talk Life Insurance:
Life insurance is never an easy topic; however, there is no denying the financial loss or stress that can occur when someone dies or become seriously ill. The truth is, dying suddenly… due to an accident or unexpected illness or even natural causes can happen to anyone at any time. So while most of us do not like the idea of discussing life insurance, its benefits certainly have an important place in one’s overall financial planning. When you sit down with an expert who has your best interests in mind, you may find that life insurance is something you not only need, but truly want, to protect your family, dependents, business and legacy.
So, why Life Insurance?
Ultimately, it provides peace of mind, plain and simple.
No amount of money can ever replace a person. But more than anything, life insurance can help provide protection for the uncertainties in life. Life has risks – there is critical illness, loss of income, death, all of which can create significant financial burden. Why not manage that risk by transferring the financial burden to a life insurance company?
Throughout our lives most of us work very hard to take care of our spouse, partner, children, and family members. It’s just as important to consider providing financial support for the future living costs of surviving dependents. Life insurance helps your loved ones as it can replace your income, after you’re gone. It also provides tax-free cash to pay estate and death related expenses, taxes and fees.
Nothing can replace you, but planning ahead with life insurance extends your love and support for loved ones long after you are physically able to. Death does not mean debt free. Your debt could become a tremendous burden, on top of the already emotional toll your absence creates in your family members’ lives. Life insurance can cover these expenses without financial hardship or further stress.
Life Insurance isn’t just for individuals. It can protect a business from financial loss, liabilities or instability in the case of the death of a business owner/partner. Whether providing necessary short-term cash or providing a replacement for the potential income lost when a key partner goes, life insurance can be invaluable in maintaining the business you’ve worked so hard to build.
Life insurance is a special financial asset, which can help increase your credit and aid in obtaining a loan from a lending institution. Many policies have cash value, which even in the case of bankruptcy cannot be touched by creditors.
How about supplementing your retirement?
You can use life insurance to ensure your retirement savings last as long as you do. One insurance product that can provide pension like benefits is an annuity; this is where you invest a certain amount of money and in return you get a guaranteed stream of income monthly, for as long as you live.
Do you care about a cause?
Life Insurance can enable you to leave a lasting gift to a favorite cause or charity that is much larger than you would otherwise be able to donate.
Some benefits of having Life Insurance…
Younger is cheaper, because life insurance premiums usually increase with age. Try not to delay purchasing life insurance as it may become more of a financial burden. It is also important for you to act early in the event ill health happens, this is because you may not be able to get life insurance to the extent you need it, or at all.
Being diagnosed with a terminal illness while covered by life insurance will provide
financial support based on the terms of your policy.
Life insurance can also be used in case of emergencies by requesting a withdrawal of
cash values accumulated on the policy.
So what steps do you take now?
UNDERSTAND WHY YOU NEED IT
INCREASE YOUR KNOWLEDGE: Research.
CONSULT A LIFE INSURANCE PROFESSIONAL.
DETERMINE THE AMOUNT OF COVERAGE YOU NEED
FIND THE RIGHT TYPE OF POLICY
CHOOSE THE RIGHT COMPANY
MAINTAIN YOUR PREMIUM PAYMENTS
Life insurance is a big purchase and one that can stay with you for many years. If you have an old policy lying around, consider having it reviewed by your financial advisor. It may make sense to buy more insurance (especially if your circumstances have changed in the past few years).
Finally, even if you have a group life insurance policy through your employer, do NOT assume that it is an adequate amount. Most group life policies that are offered through employers will cover 3 times your annual salary. Research shows that on average an individual needs insurance coverage that is 10 times their annual salary. Even if your group life coverage is an adequate amount, what happens if you leave the company or get fired? You would suddenly be without any form of life insurance.
Like most things in the financial planning arena, insurance can seem complicated and overwhelming at first. So I cannot over emphasize the importance of speaking with a professional you trust and do not be afraid to ask questions.
Insurance is a big purchase and something that could be invaluable to you and your loved ones.
Meila McKitty Plummer, B.sc, LUTCF, FSS
Financial Services Specialist
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