January 10, 2020
What Life Events Trigger Insurance Needs?
When is the right time to buy life insurance? Canadians constantly search for that sweet spot where financial protection makes sense. While buying it too early may same like a misdirection of funds you could better spend in your youth, waiting too late can also have some adverse financial repercussions.
Luckily, there is a rule of thumb that helps you in your insurance decision making. Life events, beget life insurance (and its related products). Here are the milestones that usually indicate it’s time to call your life insurance broker.
Marriage and Cohabitation
Finding that special someone and making it official is amazing. The boring part? Integrating your financial lives. Whether you are the main breadwinner in your relationship, more of a 50/50 split, or a stay-at-home spouse, making sure your partner is taken care of should something happen to you, becomes more important once you’re married and/or living together.
Life insurance protects those who are financially dependent on us should we die; if you unfortunately pass away, can your partner handle the mortgage, car payments, or other living expenses on their own? Providing that financial cushion to one’s partner can help them grieve your loss and best live the life both you had planned in your absence.
Closely related to the above is when you start having children. From ages zero to 18 you are responsible for your offspring, but these days the age limit usually extends much further than that. From strollers and cribs, to first cars and university tuition, raising kids can be expensive. While you do your best to financially plan for the future, having kids drastically changes how you use your current income and savings, and your intentions for your future income.
Whether you have a co-parent to depend on should something happen to you, or you are going it alone, the financial implications of raising children is a long term commitment that requires planning. Unless you have significant savings that your family can dip into should the worst-case-scenario occur, life insurance is essential for those with children.
Not to mention life events you may have intended to contribute to, like your children’s wedding or helping them purchase their first home. Fortunately, term life insurance can be a cost-efficient way to protect your children’s future and the help you always planned on providing.
We hinted at this one above. For many Canadians, real estate – and specifically their home – is their biggest asset and investment. We’re guessing you didn’t roll up to an open house with a briefcase full of cash. Like most, you have a mortgage and a multi-year financial commitment to your lender, and you want to make sure your family can still live in the house or keep its value should something happen to you.
You may think you’re covered as your lender offered you mortgage insurance. But, not only is mortgage insurance an incredibly expensive way to protect your home debt, it isn’t a fully guaranteed product and could pose issues when it comes time for your loved ones to collect the death benefit. Instead, consider mortgage protection through term life insurance. Not only does it cover your mortgage debt, but it can pull double – or even triple – duty by covering the marriage and children situations above.
A career change can change your insurance needs in several ways. If changing jobs, your workplace benefits will more than likely change providers and coverage amounts as well. While you may have had generous life insurance coverage through group benefits before, that can change instantly when changing or losing one’s job. Getting your own private life insurance can eliminate any worries or shortfalls in coverage. And chances are the coverage amount will be much more generous.
The other career situation that triggers an insurance need is starting your own business. Your risk profile can change as you update how you earn a living, and with it the needs of your beneficiaries. Not only is it your family and debts which need to be covered, but business partners and other potential liabilities.
Regardless of the reason or immediate motivation, life insurance can give you the peace-of-mind to keep creating life events worth protecting.
PolicyAdvisor.com is an innovative Canadian online insurance broker providing a digital solution to an archaic industry, combining modern technology, intuitive design, and real-world expertise to make insurance buying simpler, straightforward, and stress-free. Visit www.policyadvisor.com to access our free online insurance calculators and find out how you can save money when comparing and buying insurance online.