Insurance: What You Need to Know

If you have kids, you need Life Insurance...here's what you need to know!
 
There are 3 main types of life insurance: Term Life, Whole Life, and Universal Life:

1. Term Life: A plan of insurance which covers the insured for only a certain period of time and not necessarily for his or her entire life. The policy pays a death benefit only if the insured dies during the term.
2. Whole Life: A plan of insurance which usually has a level death benefit but sometimes, if you wish, has an increasing death benefit.
3. Universal Life:  A plan with an insurance component and an investment component.  When you pay into a universal life policy, all of the money goes into a holding account which is invested by the insurance company, at the buyer's direction into one or more kinds of investments. 

There are very few reasons, I believe, to have life insurance prior to having children (note some life insurance agents believe everyone should have it but, in my opinion, that advice helps the agent more than the client!).  I do however, believe it is critical to have life insurance once children are born.  From that moment on, there is a dependant whose needs must be covered from the risk of one or both parents losing their life.  Every family circumstance is different and therefore there is not a one-size-fits-all amount of coverage that is needed.
 
Things to consider are:

• Your total liabilities including mortgage, line of credit, etc
• The "dependency period" which is the length of time until kids are on their own (don't assume it's only 18 yrs!)
• The amount of income replacement for the surviving spouse
• Any estate planning considerations or taxes to be covered for a sale of asset (eg. Cottage taxes)

Put the coverage in place and do not procrastinate.  If any serious health issue creeps up on you, you may be deemed "uninsurable" by most companies and that is the number one risk!
 
I would be happy to review your insurance plan with you to determine if you have the right amount/type for your family.  My direct email is kristine@wealthyplanning.com.