Life insurance: what it covers, when to get it, and why to consider it
Pattie Lovett-Reid. Chief Financial Commentator, CTV News
Published Thursday, June 4, 2015 7:37AM EDT
I’m not going say: everyone needs life insurance, but I will say everyone needs to explore the option of having insurance in place.
A general rule is you need life insurance if you have dependents and I’m not only talking about children, it could be anyone who is financially dependent on you such as a spouse, sibling or even an aging parent.
Some will consider insurance if they have a young family, or maybe unexpected medical expenses down the road including long term care. It is a fact, insurance will never cover the loss of someone you loved and cared about, but it may help you get through a difficult situation much easier financially.
I reached out to someone I respect in the industry - Chantal Marr, principle of LSM Insurance, and asked her for the top five reasons people explore insurance. Here is what she had to say:
- You Never Know What Could Happen: There is no Magic 8-Ball when it comes to future financial losses and health risks. Insurance is the one product that will cover you for the 'unknown'. Whether it’s your life, health or ability to earn an income, you should be prepared and insured to cover any future unknown disasters.
- Getting Locked In At Lower Rates: If you wait too long to purchase Life of Living Benefits insurance, you may be ineligible later in life. After age 60, many life and health insurance rates start to skyrocket. Most term insurance providers won’t issue policies after age 75 and disability insurance is not available after the retirement
age of 65. Securing coverage now ensures you don't have to scramble after it’s already too late. Future insurability is also a major concern. If your health deteriorates, you may have limited options if you did not already have insurance in place
- Protect your Standard of Life: You have worked too hard for too long to let everything you've earned just slip from your hands. Countless people have been forced to drastically degrade their lifestyle choices because they did not have adequate insurance coverage to meet their current standard of living. Insurance policies should be reviewed on an annual basis to make sure coverage levels are kept current and up to par.
- Some Policies May Not Last Forever: With interest rates being so low for such a long time, some insurance carriers are getting rid of Whole Life insurance offerings. People who bought these policies 5+ years ago have locked themselves into great deals that are no longer available in the market and may never come back. The worst thing you could do is procrastinate and delay an insurance purchase.
- It's Not For You; It's for The People You Love: Insurance must be the least-selfish financial instrument available in the market. The reason you are getting covered is to protect the people who depend on you.
Jane Blaufus, of The Blaufus Group, an author and speaker for the insurance industry, has the last word, "Life insurance is there When you need it not If you need it. I have never in all of my years in the business heard of one widow or widower, who, when presented with a life insurance cheque, said “no thanks, you keep it.”Source: canadaam.ctvnews.ca