Understanding The Importance Of Whole Life Insurance For Canadians
Although Canada is a beautiful country with low crime, life is still uncertain. Unexpected events could occur at any point in time and it is difficult to prepare. As a family man or woman, your loved ones depend on you to survive. They depend on your love and the money you bring in. If you were to pass away today, would your family be able to make ends meet? In order to ensure your family is protected in the event of your death, it is essential for Canadians of all ages to acquire some type of life insurance policy.
For some, the best way to proceed will be to obtain a whole life insurance policy. It is slightly different from term life, so you will want to read below and familiarize yourself with this type of coverage.
Why Is It Necessary?
Many Canadians will not see the purpose of whole life coverage or any insurance policy at all, until it is too late. This is a major mistake and will result in your family suffering, due to your neglect. The truth of the matter is that there are few certainties in life. You never know what is going to happen from day to day. At any point, an accident could happen and your family could be forced to continue on without you. While some may see life insurance as a gamble, this will be a gamble that you’re bound to lose, if you do not get covered. Getting covered and staying covered is recommended for your peace of mind and for the future of your family.
How It Is Different From Term Insurance
Term life insurance and whole life insurance can both be very beneficial. They’ll both provide you with the reassurance that your family will be taken care of after your departure. However, they’re slightly different as well. As the name implies, term life only covers you for a specific period of time. Permanent or whole insurance is different. This type of insurance will cover you for the entire duration of your life or until you decide to cancel the policy. With whole insurance, there is no need to renew the policy every few years, so it is also more convenient. The only potential downfall is that whole insurance can be slightly more expensive than term insurance.
Nonetheless, it will prove to be well worth it for many Canadians.
Understanding What Permanent Life Insurance
There is a good chance that you and your loved ones have looked into life insurance more than on one occasion. At some point in time, everyone is going to look into this type of coverage to ensure that his or her loved ones are taken care of after their death. There are lots of different types of policies available and some of them can be rather complicated. Cash value insurance is basically a type of permanent life insurance in which the premium cost is going to remain at a constant level. This basically means, if you have this type of policy you are going to be covered your entire life. In the event that you die your policy will be paid out to your beneficiary.
What Is A Reserve Fund?
This type of insurance also comes along with some that is called a cash value. Every time you pay your premiums, a portion of this money will be inserted into this cash value fund. This fund is tax deferred and you can even borrow money against it in the future. However, you should be aware of the fact that borrowing money against this policy can cause the death benefit to decrease. On the other hand, if you never borrow against the death benefit will not decrease.
Simple Ordinary Life
The Simple Ordinary Life policy is considered to be the same as whole life insurance. This type of life insurance may also be known to a few as “traditional whole life” or “straight life”. This is actually the most common type of life insurance, next to term life. When the individual applies for this type of policy, they are often given a fixed periodic premium to be at regular intervals. This amount is based on the fact that the policyholder can and will retain the policy throughout their lifetime. The level premium was clearly invented to help make the policy more affordable.
How Your Family Can Use It
If you happen to be the family breadwinner, you have dedicated your life to carrying and providing for you family. Your earnings are utilized specifically up for the upkeep of your loved ones. If you were to exit the picture, these individuals would need to make rectifications, in order to make up for the lost expenses. This is where life insurance can prove to be incredibly helpful. Life insurance can be used in various ways and is often used to maintain optimum lifestyle and pay for daily expenses. Below, you’ll find other ways the insurance payout may be used by your family.
- Pay for final expenses, including funeral costs
- Pay off loans and debts
- Prepare for your children’s future education
- Pay off a house mortgage
- Cover medical bills
This type of insurance can truly be a lifesaver for your family. It’ll help them during the most trying time of their life. With this in mind, it is absolutely vital to acquire a good insurance policy soon! If you do not, you may end up waiting until it is too late and you family will suffer severely.