This question really depends on your individual situation. If you have a large mortgage or other debts, life insurance may be the only way to ensure your family can pay them off if you die. But if you have adequate coverage from an employer-sponsored plan, or through your spouse’s employer, there may not be a need for you to purchase a separate policy.
The basic types of life insurance are term life insurance and whole life insurance. Each has its own advantages and disadvantages.
Term life insurance is relatively inexpensive and easy to buy. It’s best for people who need coverage for a limited period of time, such as young families with small children. Term life insurance can be converted to permanent life insurance at a later date if you find you still need the coverage. Term life insurance is like car or home insurance. You get the protection against catastrophe but there is no cash value if you stop the policy.
Whole life insurance is more expensive than term life insurance, but it offers several other advantages that term life insurance doesn’t. One of the main reasons that most people opt for whole life insurance is because of its cash value. With a term life policy, your estate collect the face value of the policy when you die.
The amount of coverage needed depends on your age, health, family size and financial situation. Your insurance agent can help you determine the amount and type of coverage you need. Life insurance is often part of a financial plan that also includes disability and health insurance, along with an emergency fund for unexpected expenses.
If you’re not sure about which option is best for you, speak to a Certified Financial Planner. At Pension Solutions Canada, we can help you determine which option is best for your circumstances and refer you to quality Life Insurance providers. We’ll also help you with estate planning, address tax minimization, and answer all of your retirement questions.
Call us at 1-888-554-6661 to get started. Our services are no cost to you.