Are you looking at life insurance for the first time? From new families, new home owners, to business owners, life insurance can be one of the single most important products you can buy to protect yourself. You’re probably asking yourself, “how much do I need?” “What kind of policy is best?” and “Which company should I buy from?”
Below are some helpful tips that should help YOU make an INFORMED decision about buying life insurance!
1.Understand WHY you need it
Life insurance is designed to provide families with financial security in the event of a death. The protection can help pay for mortgages, college, and help to fund retirement. In addition, it can provide for charities and is a key element in proper estate planning. If others depend on you for income protection, you should strongly consider life insurance. Even if you don’t need insurance immediately, you may want to consider a ‘starter’ policy, if you anticipate you may have bigger needs in the future. The reason being: The younger you are, the less expensive the insurance will be.
2.Determine the AMOUNT of coverage you need
The amount of insurance that will pay out on the death of the insured individual is called the “death benefit”. To get an idea of the proper amount of life insurance for you, try our easy online calculator. Another easy way is to take your salary and multiply it by between 8 and 10, and then add any debt you have. This will ensure your debt is paid off in the event of death, and your beneficiaries will have between 8 to 10 years of income available. Of course, an experienced broker is ultimately able to help you calculate the appropriate amount of insurance!
3.Find the right type of policy
Once you and your broker figure out how much coverage you need, you can think about the best type of policy to meet your needs. There are two main types of coverage available in Canada, “Term Insurance” and “Permanent Insurance”. Term Insurance can meet your coverage requirements for a very affordable premium, while permanent coverage can be much more comprehensive and add some guaranteed cash values over the lifetime of the policy. These days, you can blend the two of them together to give you a cost effective solution with some longer term protection.
4.Look at the QUALITY of the provider
“The cheapest is not always the best?”
This couldn’t be more true when it comes to life insurance. Your broker will help you decide the best amount of coverage and the right policy, as well as identify the best insurance provider for your needs. Your broker understands the companies he or she works with best and which company will provide you the best all around value for your money.
Only a CHARTERED LIFE UNDERWRITER has the education and experience with respect to life insurance, insurance taxation, estate planning; and insurance law to help you make the most beneficial insurance decision. Working with a Chartered Life Underwriter ensures you that your advisor has the knowledge and proficiency to help guide you through the insurance planning process. Make sure your broker is licensed with multiple companies and can provide you with an unbiased opinion.
Ready to look at options? You’ve come to the right place.
Curtis Haigh, CLU®
President / Financial Advisor