Considering Life Insurance for Your Family
One of the most important tasks as a parent is protecting our family's future financial abilities.
Choosing the right type of life insurance is one of the most important but difficult tasks in securing that future. Life insurance allows your loved ones to maintain a quality of living without enduring excess financial burden.
Apply Today! Canadian Term Life Insurance Quotes & Information
But with so many different policies available how do you choose the right one? Here are some key points to help you take the first steps to picking the right life insurance in Canada for your family's needs.
- Who will be insured? A working or stay at home parent? Will it be a child?
- What is the insured's current financial contribution?
- How to choose between permanent and temporary?
- What’s the cost? Can I afford it?
Whether the parent works at home or commutes to an office their contribution to the family has a financial impact. Many Canadian insurance companies will offer insurance policies for your children, but children do not really need it. But if you worry that your child may become uninsurable in the future there are insurance riders that can be purchased to ease your mind, until the child is old enough to purchase their own insurance.
Determining the cost replacement of a working parent is fairly easy. It's basically their annual income or average annual income. But what about a stay at home parent? That's a little more difficult and would vary depending on your specific location in Canada. The most basic cost to be covered would be child care or daycare multiplied by the number of children; simple right? Well now that you have your basic costs for either or both parents, don’t forget to add inflation. For Canadian residents 3% should be a safe assumption.
Finally, how to choose the type of life insurance for your family? The most popular types of life insurance include permanent and term. In Canada permanent insurance is further divided into 3 categories but generally share the same distinction: their premiums generally do not rise over the course of the policy and cash value is built over time which the insured will have access to. Term insurance premiums on the other hand, will eventually expire and the old rate will lapse while a new higher rate will take into effect if a new term policy is purchased. Generally speaking, one type is not better than the other. Term will always be cheaper in the short run. Permanent will always be more expensive in the short run, but more cost effective in the long run.
After determining how much financial coverage is needed, you need to be approved for a policy.
The types of insurance policies Canadians will be approved for will also depend on 3 general factors: age, health, and gender. Your current financial abilities will also determine the best Canadian insurance program your family can purchase at the current time.
It is possible to purchase a combination term and permanent policy. And as your finances or family situation changes, your insurance policy can too. Keeping these simple points in mind should help you demystify the various insurance programs out there for you to choose from.
Get a Canadian Term Life Insurance Quote
