Do You Really Need Life Insurance?

As we grow older, start families, build businesses of all sizes, one can quickly come to realize that life insurance is a fundamental part of any well formed financial plan. Most everyone is aware that they need life insurance, but experience shows time and time again that most people only think about purchasing it following an important life event. That all being said, there are some key benefits to purchasing earlier than later.

Why do you need life insurance?

1. If you were to die tomorrow, who would assume your debt? Outstanding debts and taxes may need to be paid by your spouse, your kids, or your parents.

2. Do you have a family? Kids? Not having adequate life insurance could put your family at risk and leave them in a detrimental financial position.

3. Do you own a business? Having a business succession plan should you pass is an important part of business planning. Speak to your financial advisor about relevant business insurance products.
   
   

How much life insurance do you need?

Unfortunately, there isn't a "one-size-fits-all" solution. Factors such as health, age, lifestyle, number of kids, spouse, and debt all play into the amount of insurance you may need. It is important that you speak to a licensed advisor to determine the amount and type of insurance product that is right for you.

What type of insurance products are there?

Generally speaking, there are two main types: Term Insurance and Permanent Insurance. Term insurance has a set period after which premiums increase upon renewal based on the increased likelihood of mortality. Permanent insurance has fixed premiums for life (because you are guaranteed to die at some point) and also has an investment component where a portion of your premium can accumulate in a side account. Make sure you speak to an advisor about which options are best for you.

Is there anything else to know?

If you already have an old insurance policy and haven't spoken to your advisor in a while, it might be a good idea to review it — especially if you have gone through any recent life changes. Insurance also becomes progressively more expensive with age, so purchasing early can save you a lot of money on premiums. Finally, never assume that your Group Life Insurance through your employer benefit plan will be enough. Even if it covers 2–3 times your salary, consider: what would happen if you lost your job or left the company? You would be left without any form of life insurance.

Contact us today to schedule an appointment to go over your various risk management options.