When it comes to preparing for emergencies or the end of your life, it’s important to ensure that your loved ones are protected as much as possible. This is where purchasing comprehensive life insurance comes into play. The right life insurance plan can help ensure that should there be an unexpected event, your family won’t be the ones who have to bear the burden after you’re gone.
The team from Desjardins Financial Security Independent Network has helped hundreds of families prepare for the future, which is why they’ve compiled this helpful guide about the benefits of life insurance. If you’re a first-time buyer, here’s everything you need to know.
Consider Why You Need Life Insurance
Buying life insurance is a big step, so it’s important to have a clear idea about why you need it. Life insurance helps protect your family when you’re no longer there to support themselves by making funds available to cover their financial burdens.
Life insurance will help you:
- Put your children through school
- Keep up with mortgages or paying rent
- Settle any outstanding debts you’ve left behind
- Provide funds to cover daily living expenses
Two Kinds of Life Insurance
There are two different types of life insurance available and the right one for you will depend upon your financial state and needs. Although both types offer comprehensive coverage, there are some key differences between them.
- Term Life Insurance: This is the most affordable type of insurance and only lasts for a set period of time; that’s why it’s called “term” life insurance. When your term is finished, additional coverage can be purchased without the requirement of having to disclose further information about your state of health.
- Permanent Life Insurance: This life insurance type often costs more than term life insurance, but it also includes the option to grow the cash value of your investment and increase your lifetime savings. This cash investment is available to you when you’re alive to cover important expenses and will be passed to your loved ones after you’ve gone.
Consider Your Current Financial State & Family’s Needs
One of the best ways to determine what type of insurance will work best for you is to take into account your monthly expenses, like how much you spend on bills, groceries, loan payments, and other obligations. Add this number to other, more long-term expenses like retirement fund contributions or paying for your children’s’ education, as well as expected funeral expenses.
With this number, you should have a clear idea of your annual expenses. Then, multiply this by however many years your loved ones will need to rely on this amount of money to gain a better understanding of the type of life insurance you’ll need.
Contact DFSIN today to learn more about the benefits of life insurance!
For more information about life insurance costs and plans, contact Desjardins Financial Security Independent Network online today or call (416) 695-1433.