Why do I need Life Insurance?
Life insurance helps to secure the financial future for people close to you – your loved ones who depend on you. Life insurance can also be a useful financial tool during your lifetime. You can use it for cash withdrawals, collateral for loans, retirement income, or to finance tuition costs for your children. The decision to buy life insurance depends on your responsibilities and your financial needs for the future.
How much life insurance do I need?
The answer to this question depends on you – your lifestyle, your responsibilities and your stage of life. After we understand your needs, we can give you an accurate idea of how much life insurance is appropriate.
Can I use life insurance proceeds to pay estate taxes when my business, cottage or income property is passed on to my children and heirs?
Yes, not only is it possible, it’s the cornerstone of effective estate planning. When your estate passes to your heirs, it is – with the exception of your principal residence – treated by Canada Revenue Agency as income to your estate. Your heirs may have to borrow money or sell off part of the estate to pay the tax. As a result, your heirs could see a much smaller benefit from your hard work and generosity.
Estate planning is one of the main reasons for buying permanent life insurance. When your estate passes to your heirs, the tax-free* insurance benefit offsets the taxes, so your heirs won’t need to sell their inheritance or take out a loan.
*Note that probate fees are applicable if you have not designated a beneficiary and the proceeds of your policy become part of your estate.
When should I buy life insurance?
You should review your life insurance needs during key life events:
The birth of child or added financial responsibilities
Purchase of a new home
A new job
Divorce or retirement
Do I need to complete a medical questionnaire or take any other tests?
When you apply for insurance, you will need to complete a medical questionnaire. Other tests may also be required based on your age and the amount of insurance you have applied for. If you are required to provide other tests, at your convenience, we will arrange to have a nurse schedule a visit to your home or your workplace.
What's the difference between term and permanent life insurance?
A main difference between term and permanent life insurance is that term life insurance has an end date, for example at age 80, whereas permanent life insurance provides coverage for life.
Term life insurance is generally lower in cost because it provides a death benefit for a set period of time. The premium you pay goes towards protection only. Most term life insurance policies don’t build any cash value. (However, most term life insurance policies do allow you to convert your insurance to a permanent life insurance plan).
Permanent life insurance can offer both protection and a cash value. Part of the premium in permanent life insurance goes towards the death benefit – the protection component – and part of it goes into a savings component to accumulate cash value. Permanent life insurance is designed to provide protection for your entire lifetime.
What is universal life insurance?
Universal life insurance policies combine permanent life insurance with an investment plan. A portion of each premium purchases your life insurance, while the balance is deposited into your investment plan. Because of this, you protect your family against the possibility that you may die, and you protect your financial future with a tax-deferred or tax-free*, creditor-protected investment account.
How Independent Advisors Operate
Independent insurance advisors, like independent financial advisors, are thought to be able to provide their clients with a wider array of options when it comes to insurance products. They take into account the different coverage needs of the client and select a policy that provides the necessary coverage at a reasonable price. Independent advisors are not committed to one insurance company.