When is the right time for Life Insurance?
If you are thinking about changing jobs, buying a home, taking on more debt, or starting a family, NOW could be the right time for Life Insurance.
However, to really answer this question, let’s first look at what Life Insurance is and what it protects…
What is Life Insurance?
A Life Insurance Policy that covers you for either your lifetime or a specified period usually 10 or 20 years. If you pass away, your policy is paid out tax free to the person or persons of your choice.
Why do I need Life Insurance?
The payout from a Life Insurance policy will help to pay off your debts, including your mortgage as well as taxes from your investment accounts. (Your investment accounts can be taxed up to 53% when you pass away). This means that the investments and home you leave to your loved ones actually goes to them instead of the Bank or CRA.
If you jointly own a home with your partner and are contributing to the mortgage each month, a Life Insurance Policy Payout will allow your partner to continue paying your portion of the mortgage and will allow them to stay in the home without having to sell it in the event you prematurely pass away.
You may be thinking, “but I already have Life Insurance through my employer”.
Yes, you probably do, but it probably only covers 1-3 x your salary. This may not be enough to cover your outstanding loans, including a mortgage and cover the taxes on your investments assets that you plan to leave to loved ones. As well, if you leave your job or are laid off, your insurance coverage through your employer may not be portable, meaning it no longer protects you.
OR
You may be thinking, “but I already have Insurance through my mortgage”.
Yes, many mortgage lenders also offer Mortgage Insurance when you take out a mortgage with them. However, with this type of coverage, known as Creditor Life Insurance, the beneficiary on this insurance is the Lender, NOT your spouse, partner or kids. This means, that if you pass away, the Lender gets the payout from the insurance policy. Not only is this type of coverage more expensive, but it is also not portable. If you change lending institutions or the mortgage term is up for renewal, you will have to reapply for the insurance again, and it could become even more expensive as the cost of insurance increases each time we reapply at an older age.
Why is NOW the right time to get Life Insurance?
A major factor in determining the cost of Life Insurance is your age. The younger you are when you apply, the less expensive the annual premiums will be throughout the course of your policy term.
How do I determine if Life Insurance really is the best choice for me right now?
That part is easy: Contact us or schedule a consultation so we can assess your Life Insurance needs together.