Term Life Insurance: Affordable Protection for Your Family
When you have a family, your priority is always their well-being; you work to ensure their everyday needs are met and focus on securing a bright future. With that in mind, have you ever pondered the possibility of what could occur if you were to pass away prematurely?
Will your spouse have the financial resources to maintain their quality of life? If your spouse needs to go back to work to cover the bills, who will take care of the kids? While the thought is worrying, these concerns can be laid to rest with a life insurance policy.
What Is Life Insurance?
Life insurance is a contract between a policyholder and an insurance company. The insured person pays a monthly premium in exchange for a tax-free lump sum payment to a designated beneficiary upon their death.
There are two types of life insurance: term life insurance and permanent life insurance. Your choice of insurance largely depends on your family’s financial needs.
Permanent Life Insurance
Permanent life insurance in the form of whole life, or universal life, gives you the peace of mind of having coverage throughout your lifetime.
Whole Life Insurance
A whole-life policy provides lifelong coverage with stable premiums and a savings component managed by the insurer.
Universal Life Insurance
Universal life insurance offers flexibility in investment options, allowing you to combine life insurance with an unbundled investment account of your choice. The policy has a cash value, but both the death benefit and investment cash value can vary based on the market.
Term Life Insurance
Term life insurance is ideal for families. While it doesn’t provide coverage for your entire lifetime, it does offer the benefit of insurance coverage when you need it the most.
Choose Your Coverage Term
With term life, you can choose coverage for 10 or 20 years. The best way to decide what you need is to consider what period of time your family will need to be supported. If you have older kids, 10 years may be sufficient; however, with a younger family, you might need maximum protection and opt for a 20-year term.
How Much Coverage Do You Need?
Have you considered how your family would fare financially if you were to pass away? Think about what they would need to maintain their current lifestyle and pay for expenses such as a mortgage, food, utilities, education, and extracurricular activities. It’s a good idea to determine how much your family will need for the year. Then multiply this figure by the number of years they will need the support, and you’ll arrive at an ideal figure.
How Much Is Term Life Insurance in Alberta?
There’s a misconception that term life insurance plans are unaffordable and out of reach. This is simply not true! Term life insurance is very affordable.
There is a huge difference between locking into a policy in your early 30s or late 40s; while premiums tend to get higher with age, locking into a term life policy early, means you’ll be paying the same lower-cost life insurance premiums for the duration of your term.
Do I Need Private Life Insurance with a Group Plan?
It’s important to note that group plans provided by an employer may not offer you the exact coverage you require. Your needs might differ from those of your colleagues, depending on various factors. For instance, having kids or a working spouse can influence your insurance needs. Furthermore, if you leave your job, you will lose access to any group plan benefits.
For this reason, it’s crucial to consider taking out a personal policy to ensure continued coverage.
The Benefits of Talking to an Advisor
An insurance advisor has extensive knowledge of the range of products on the market. There’s no one-size-fits-all solution when purchasing insurance, and you’ll receive the most value when your policy is tailored to your needs.
Your advisor can walk you through the process and conduct a needs analysis to assess your situation. While you can calculate your monthly costs, your advisor will also factor in any liabilities, death expenses, and taxes to give you a more realistic idea of what you need.
Purchase Term Life Insurance in Edmonton
At Red Willow Wealth Management, we believe that life insurance is an essential aspect of your financial plan. Financial planning is about preserving your wealth and ensuring your family’s well-being in case of your premature passing, and life insurance can help you achieve this.
If you’d like to learn more about life insurance coverage, contact us so we can sit down over coffee and discuss your plans and goals, and how your insurance needs fit into them.
