As a parent, you always do the best you can for your child. If your child is diagnosed with a serious illness like autism, type one diabetes, or cancer, would you not do everything within your power to help? You are spending your hard-earned cash to provide a healthy lifestyle and opportunities for your child.
Would you consider spending a few dollars more each day for protection from the dire consequences of a serious illness? Our health priority plans will provide you with a lump sum of tax-free cash in the event of your child is diagnosed with one of the covered conditions. Access to tax free cash can give you choices you do not normally have in a confined an overburdened medical system and help alleviate stress caused by:
• Taking time away from work • lost of income and lifestyle • taking care of your family and your sick child • trave for medical treatments Don’t let critical illness compromise your child’s future. Give your child every chance to enjoy life and realize their hopes, ambitions, and goals.
Life insurance is a necessity if your family depends on your salary for housing expenses, servicing debt, and general living. But how much life insurance do you need?
We can use a this simple rule
L oans and debts
I income remplace
F final expenses
E education
D(ebt)
We’ll start with how much debt you have, not including your mortgage. This includes any credit cards, lines of credit, car loans, and any student loans.
I(ncome)
Next, we need to calculate how many years your family would need your support, and multiply your annual salary by the required years. The number of years can be until your child graduates high school, leaves university, or buys their own house – this is up to you.
F(inal expenses)
Your funeral estimate is $15,000
E(ducation)
How much will it cost in twenty years to send 2 kids off to college? What if they end up wanting to do their masters, PhD, or even a college diploma? Will they study at home or abroad? These are all costs you’ll want to have covered.
From decorating a nursery to baby-proofing a home, becoming a new parent comes with a long checklist of to-dos. It’s a significant life change and it can impact everything in your life.
While it’s not the most fun to think about, one part of being a new parent that is commonly overlooked is end-of-life planning.
Whether you’re expecting or recently became a parent, here’s why you should put life insurance and estate planning at the top of your list.
Life insurance and estate planning should go hand in hand
Life insurance and estate planning work together to help protect your family’s future.
While we know it’s difficult to think about death during this special time in your life, you’ll enjoy peace of mind knowing that you’ve taken the steps to provide a safe financial future for your family.
Life insurance
It’s commonly overlooked, but life insurance is one of the best ways new parents can protect their family. Life insurance helps your loved ones in the event of your unexpected death, by providing a tax-free lump sum payment to your chosen beneficiaries (often a spouse or your children). This can help offset unexpected costs, loss of income, and cover any other expenses while your family adapts to their new life situation.
Some things that life insurance can cover include:
Mortgage payments
Funeral/burial expenses
Personal loans (e.g., for automobiles)
Future expenses (e.g., university tuition for children)
Wills and estate planning
Estate planning is the process of outlining a plan in advance for your assets (or your “estate”) after you pass away. This includes creating a will and power of attorney documents, and other end-of-life planning details.
Almost two-thirds of parents in Canada don’t have a will. As a new parent, having a will in place is one of the best ways to protect your family in the event that you pass away. There are many reasons parents need a will, including:
Choosing a guardian for minor children
Outlining specific gifts and wishes
Managing details around inheritances (including the amount your beneficiaries receive and the age at which they get the inheritance)
Without a will, many of these decisions will be made by the courts based on provincial legislation — and in many cases, these decisions may not reflect the choices you would have made yourself.
Part of estate planning also includes making power of attorney (POA) documents. Unlike a will, you may never need your power of attorney. But in the event of an unexpected emergency, your POA will make decisions about your property, finances, personal life, and medical care.
Having a child is a common trigger to purchase life insurance, but some people purchase life insurance during other life events, such as after getting married or buying a home. So you may already have life insurance
You may also have life insurance coverage through your employer benefits program, but be sure to check the amount. It’s typically a smaller plan and often not enough to cover all your expenses.
If you already have life insurance, it’s important to update your policy accordingly as a new parent, new project in your life. This can include removing backup beneficiaries and adding your new child or making your child the primary beneficiary. Some parents will also increase the amount of coverage to account for the financial costs of a family versus just an individual.
If you have health insurance or other benefits through your workplace, this is a great time to make sure your child is added as a beneficiary to those plans, too.
Financial planning includes determining how much auto, home, and business insurance is required to protect your assets. However, when it comes to life insurance, you’re looking for a policy that will protect the people left behind when you die.
1. Putting it off too long
One of the most significant risk factors for dying is age. The older we get, the closer we are to taking our final bow.
2. Counting on your employer
If you’re a full-time employee of a mid- to large-size company, chances are you have some employer-sponsored life insurance. If that’s all the coverage you carry, losing your job to another pandemic or layoff could leave you vulnerable.
3. Buying too little
It’s easy to underestimate how much your beneficiaries will need to maintain their current standard of living if you die. The amount of life insurance you need depends on how long your beneficiaries will need support.
4. Allowing your policy to lapse
Life can throw some unexpected curveballs, including job loss, business failure, and serious illness. As you work with a licensed insurance agent to find the right policy, balance the coverage you need with a premium you can reasonably afford to pay.
5. Failing to reassess your needs
Your life insurance needs at age 22 will differ from those at age 40 or when you’re 60. At least once a year, take a peek at your policy to remind yourself of how much you are carrying. Determine whether you need more to meet the growing needs of your beneficiaries
More and more people are realizing that adding life insurance to their financial plan can provide a measure of security for their loved ones.
1. Know the difference between term and permanent life insurance. Term life insurance coverage lasts for a set amount of time – most policies are for 10 to 30-year terms – while permanent life insurance covers your entire lifetime.
2. Determine how much you need. There are several factors to consider, including your age, debts, monthly expenses and number of children. Did you know that even stay-at-home parents and student loan cosigners could have a definite need for life insurance? An insurance agent can help you figure out who and what you need to protect.
3. Purchase sooner rather than later. If you hold off buying term life insurance until age 50, the rate can be up to 212% higher compared to buying at age 30. Policies are more affordable than you may think.
4. Talk with a trusted advisor. An insurance agent can help answer any questions you have, walk you through the process, lay out the options that make sense for your life and budget, anticipate your needs and make the process efficient. In many cases, your advisor can tell you how much you need and how much it can cost in just a couple of minutes.
Purchasing a life insurance policy may be beneficial if you have family members who depend on you financially. But the right time to buy a life insurance policy is different for everyone..
Life Insurance In Your 20s…
Whether you’re getting married, starting a family or working to pay off student loans, your 20s should be the time you start thinking about life insurance.
The main advantage of buying life insurance in your 20s is that you might be able to purchase a higher coverage term policy for a more affordable monthly premium.
In Your 30s…
If you have a family, life insurance is a purchase you can make to help the people you love have the financial support they may need, even if something were to happen to you. If you were to die, who would pay for your children’s college tuition? Your outstanding student debt? The mortgage on your house.
In Your 40s…
Your 40s can be a time of changing commitments and unexpected financial hurdles, making it an important time to keep life insurance on your radar, even if you already have a policy.
In Your 50s…
Finding an affordable life insurance policy in your 50s might take more time than if you were buying one in your 30s or 40s, but it’s still not too late to get the coverage you may need..
In Your 60s and Beyond…
Believe it or not, you can still get a life insurance policy in your 60s and 70s. Long-term policies (for 20 or 30 years) are likely out of the picture due to common age limits on policies, but you still may have options for coverage if you’re looking for a plan now.
A mortgage is a long-standing commitment, and it doesn’t die with you. If you pass on before it is paid off, someone has to take up the responsibility of paying up the loan or risk losing the house. And that is when life insurance policy to cover your mortgage comes into play.
Mortgage protection life insurance, also referred to as mortgage protection insurance refers to a type of policy which pays off your remaining mortgage in case of your demise.
A mortgage life policy relieves the surviving members of your family from losing the house to the lending institution or taking on the financial responsibility of paying the remainder of the mortgage.
This life insurance will always repay the loan only if a mortgage still exists at the time of passing, while life insurance pays up death benefits only when the insured person dies. This kind of insurance policy is worth considering, regardless of whether you have one home, a second residence, or multiple residential properties.
Lineth Orea Aguirre 