You may have heard everyone talk about life insurance. But do you need life insurance? Is life insurance worth it? Is it worth the premiums that you will have to pay monthly or annually?
Suppose these are the questions on your mind, or you may even wonder, ‘Can’t I use these premiums for something else?’
In that case, you should read on. This article discusses why buying a life insurance policy in Canada is worth considering.
Is Life Insurance Worth It in Canada?
There is no one-size-fits-all answer to this question. Every situation is unique, and each individual’s situation determines if buying a life insurance policy right now is worth it or not.
If you have a person or persons who depend on your income, you would need life insurance to ensure that they are financially protected should something happen to you.
So, life insurance is 100% worth getting if you have a family and dependents that would be financially affected if you die.
If you pass away, would your family be able to provide for themselves? Do they have enough to cover your final expenses? Would your death adversely lead to changing their current lifestyle? Would they be able to cover your mortgage payments?
If your answer is no, then life insurance is worth considering. The premiums you would pay to maintain your life insurance coverage are offset by the significant death benefit your family would receive.
However, some people can genuinely forget about buying a life insurance policy for now. Not everyone has a dependent or some debt they have to pay. Some may have enough assets to care for their dependents if they die.
Who Needs Life Insurance?
Deciding if buying life insurance is right for you at this moment is a challenging task. Not everyone needs life insurance right now, but it is still an excellent choice for everyone.
Deciding who needs life insurance is a pretty broad question, and it varies case by case. Unlike car insurance in Canada, life insurance is not required by the law. So, your situation determines if you need life insurance or not.
Suppose you have a spouse and kids who depend financially on you and want them to maintain their current lifestyle if something happens to you. You would need a life insurance policy.
Suppose you have dependents and don’t want them to be burdened with your debts, such as mortgage, car loans, and credit card bills. In that case, you need a life insurance policy if you want your dependents to stay in your family home and not forfeit it.
Suppose you have family and dependents and want to ensure they are looked after, ensure they can cover their everyday living expenses, and pay for future living expenses, like the cost of post-secondary education for your kids. In that case, you would need a life insurance policy.
If you are young, single, and without any dependents, you can still get a life insurance policy. They may use the death benefit payout to cover any outstanding debts you might have and also cover the inevitable final expenses. They can also use it to support your loved ones financially or donate to your favorite charities.
If you own a business and want to keep the company afloat after you die, you need a life insurance policy with the business as your life insurance beneficiary.
Suppose you are a senior and you don’t want your family to deal with the financial hardships of planning your funeral, and you also wish to leave an inheritance for your grandchildren. In that case, a life insurance policy is worth considering.
Who Doesn’t Need Life Insurance?
Suppose you are young, single, without debts or dependents, and have enough assets and savings to cover your final expenses and care for your loved ones. In that case, buying a life insurance policy might not be necessary.
Also, suppose you have a family and are financially buoyant enough to cover to leave them well-cared for, taking care of your mortgage, leaving them no outstanding debts, with lots of savings tucked away. In that case, you might not necessarily need a life insurance policy.
Further, if you are not financially capable of taking up another monthly bill to pay, it might be wiser to save your money elsewhere if you can’t afford monthly premiums.
However, buying a life insurance policy comes with many benefits. As a young and single Canadian, it would be better to buy a policy at your young age and secure low premiums.
Key Life Stages Where Life Insurance Can Help You
Life insurance will have different benefits at different stages in your life.
Your life insurance policy will be worth the premiums you will be paying when you look at the benefits you will get at these stages of your life.
Young Age
While buying a life insurance policy might not be at the top of your list at your young age, not purchasing it will make you miss out on an essential financial planning component.
Most insurance companies offer lower premiums to young people. The younger and healthier you are, the lower the premiums you will have to pay.
A life insurance policy can also be an investment opportunity for you at a young age. A permanent life insurance policy offers cash value that can be used as an investment vehicle.
Middle Age
If you are at this stage of your life, you might have already had a family and purchased a home that requires a mortgage.
A life insurance policy can help protect your family from covering the mortgage debts; suppose something happens to you.
Life insurance can also provide financial protection for your young children who depend on your income to ensure their lifestyle is not affected by your loss. The payout can also help cover their college tuition.
Retired
After many years of labor and hard work, retirement gives you time to enjoy and raise your feet.
A life insurance policy can give you peace of mind knowing that you are leaving your family financially protected.
Your life insurance death benefit will cover the outstanding mortgage and final expenses should something happen to you. Your family will not be left with the burden of paying your debts.
You can also extend your financial protection to your grandchildren and their needs.
Final Thoughts on Is Life Insurance Worth It
So, if you are wondering, ‘Is life insurance worth it?’ As you have seen, the answer is not simple.
It all depends on your financial obligations, goals, and current situation. A life insurance policy could be extremely important if you want to financially secure your family, business, or estate.
However, buying a life insurance policy from companies like Manulife may not be necessary if you are single, living modest, are can save through other means. But life insurance would be worth considering if you have dependents, outstanding debts, and not enough savings to care for your loved ones and cover your final expenses.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
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