Life insurance is about protecting everyone. It not only gives the insured peace of mind, but everyone around them that relies on their financial contribution to the family.
It is useful to compare life insurance options to determine just what value a certain life insurance policy can be to you and your family.
Protection for Loved Ones
Life insurance will protect a spouse and children from potentially difficult financial circumstances in the future should the main wage earner of a family lose their life to a disease or accident. Where this happens sooner than anyone would want, it is the finances that can become a major issue where provisions have not been made.
The sooner you can set up a life insurance policy, the better, because nobody can predict when an upsetting event may occur, and life insurance is cheaper to purchase when younger.
What Can We Use Life Insurance Money For?
Life insurance policies, when triggered, will help to pay off debts, medical expenses, funeral expenses, and ongoing living expenses. This will mean less to worry about for affected parties. It will be an upsetting enough time when somebody passes on, without having to worry about stretched finances on top of that.
The Flexibility of Life Insurance
The good thing about life insurance in canada (or any other place, for that matter) is that the sum insured can be customized to the situation of the insured. It can be balanced with the means used to afford the payments.
Also with life insurance, you can nominate who will benefit from the policy, should the worst happen. This ability to assign nominees means that a financial situation can be assessed concerning how those left behind might afford things. It is a kind of budget that you will be working out, so that you know who the nominated parties should be. Usually, it will be those close to you like those who live with you. However, financial support can be provided for those who do not reside with you.
Some life insurance policies will have an investment component attached to them. This provides the opportunity for the main wage earner to build up a sum of money as a nest egg for the future or in case of a rainy day, as it is termed when things are not going too well financially. This could be because a job has been lost through redundancy, amongst other reasons. It is also a good retirement option.
Universal life insurance, for example, will be sold as a combination life insurance, which has an investment product attached to its life cover. This type of life insurance will last a lifetime, as long as the premiums continue to be paid. It will provide a standard death benefit, as well as accumulate a cash value over time.
Different Types of Life Insurance Cover to Satisfy Needs
Apart from universal life insurance, other life insurance policies will provide variations on the cover and how it is provided. These include term life insurance, variable life insurance, whole life insurance, guaranteed issue life insurance, simplified issue life insurance, and group life insurance.
In terms of cost, term life insurance will often work out as the cheapest kind of policy in this area of insurance. The downside financially, though, is that if you should outlive the policy, then your beneficiaries will not receive anything from it. You could liken it to renting a house instead of buying one, in terms of there being nothing to show for your payments. What you do get, though, is a cheaper way of achieving peace of mind.
Conversely, whole life insurance lasts until death, as long as you keep up the premium payments. You will also be building a cash value. This type of cover is more expensive, though.
Group insurance will be offered by employers to their workforce. The premiums here are based on the group of employees as a whole, as opposed to each employee. It is beneficial that employers generally offer the basic cover for free. Then, employees can purchase supplemental life insurance.
It is clear just how much value life insurance offers. Peace of mind can only be achieved through having such protection. There can also be value in building up a cash sum by way of a combined life insurance and investment policy. The different types of life insurance will mean that there is value in these types of policies for everyone, whether you are just looking for protection for loved ones or also an investment opportunity.