Find out if permanent life insurance is good for you

Submitted

Looking for financial protection for the people who depend on you that will last as long as you live? Permanent life insurance might be the answer.

Whether you’re looking back on your life or dreaming of your future, some milestone moments may come to mind: graduating from school, buying your first home, raising your children. Whatever the milestone, you can usually count on the need to plan ahead. Your diploma may leave you with a student loan that your parents have co-signed. That beautiful home comes with a mortgage that you need to pay down. And your kids will depend on you for all sorts of living expenses – for quite some time.

There’s a lot of responsibility attached to milestones. This is where life insurance can give you a helping hand.

Why is life insurance important?

Life insurance can help protect your family financially. The death benefit – that’s the amount of money paid or due to be paid when an insured person dies – from a policy can help your family cover expenses like funeral costs, child care and tuition, home maintenance, estate and legal fees and any outstanding debts and bill payments. It can also help give your family financial assistance after you’re gone.

There are three basic types of life insurance: term, permanent (also known as whole life) and universal life.

How does permanent life insurance work?

If you’re looking for lifelong protection, this type of insurance may appeal to you. Why? Because permanent life insurance stays in effect throughout your life, no matter your age or health. You just have to be sure to pay the monthly or annual premiums – those are the payments you make in exchange for your life insurance policy.

Sounds like a solid deal, but how can you tell if it’s right for you? Here’s some of what you need to know before you buy:

Are you someone who likes to plan for the future? Do you want a guarantee that your coverage will last for as long as you live? Or maybe you want to know exactly how much you’ll have to pay for insurance every year. Then permanent life insurance may be a good choice for you.

Here’s what you can expect from permanent life insurance:

Your life insurance coverage is guaranteed for as long as you live and keep up the required payments.

You’ll get the security of having a premium that stays the same, regardless of your age or changing health.

How can you grow your money with permanent life insurance?

Most permanent insurance policies include a feature called cash value. It’s like equity in your home: It grows over time and you can borrow directly against it or use it as collateral for a loan. You can also withdraw your cash value, but this will usually reduce your death benefit.

While the cost for permanent life insurance is higher than term life insurance, permanent tends to pay off in the long run. Term life insurance is initially inexpensive if you’re young and healthy, but it only provides temporary coverage. Its cost can rise dramatically as you renew it in later years, and there’s also no cash value to borrow against or cash in.

What about life insurance through your workplace benefits?

Does your employer offer life insurance through your benefits plan? That’s a good start, but here are a few things to keep in mind about your workplace life insurance:

You can’t take it with you if you change employers. You’ll have to apply again at your new employer, and you won’t have any coverage between jobs. You may, however, be able to convert your group coverage into protection for yourself as an individual.

It ends when you retire.

It can increase in cost as you get older.

True, buying life insurance through a group plan is often cheaper than getting it as an individual. But is your group coverage enough to cover your share of your family’s expenses plus big-ticket items like a mortgage or university tuition for your kids? For these reasons, you may want to consider buying individual life insurance that you can take with you regardless of your employment situation, and top it up with group coverage through your workplace plan.

Talk with an advisor about your life insurance options

Once you’ve decided on a permanent life insurance policy, you’ll find out that there are different types of permanent insurance policies. Some let you stop making payments at a specified time but protect you for the rest of your life. To find out what life insurance policy suits your financial situation, it will help if you understand the different kinds of coverage available and the features and benefits they offer. Maybe your needs are simple and you need just one type of insurance to cover your spouse or kids. Or your situation could be more complex, with a blended family or a business to protect, in which case you might need more than one type of life insurance.

When buying any type of life insurance, it helps to look through all your options with an advisor. Why? Because an advisor can help you build life insurance into your overall plan. An advisor’s professional expertise and knowledge about insurance can be particularly helpful if you have a sizable estate to pass along to your heirs or if you’re in a higher tax bracket.

Source: www.sunlife.ca

Sponsored by Shannon Hood Financial Services Inc.

Just Posted

Kootenay-Columbia MP talks throne speech, USMCA trade deal

Rob Morrison to open constituency office in Cranbrook at 800C Baker St. on Dec. 19

Kootenay-Columbia MP reacts to leader’s surprise resignation

The resignation of Conservative Party leader Andrew Scheer caught members of his caucus by surprise

White Hatter educates students and parents on digital safety

On Tuesday, December 10, the White Hatter, an organization dedicated to educating… Continue reading

Town presents third quarter bylaw statistics

At last Tuesday’s Town Council meeting, the Town presented their bylaw statistics… Continue reading

Golden father shares his passion about home made hockey rink

‘It’s definitely one of the best investments I’ve ever made for my kid’

‘Not a decision I came to lightly:’ Scheer to resign as Conservative leader

Decision comes after weeks of Conservative infighting following the October election

‘British Columbians are paying too much’: Eby directs ICBC to delay rate application

Attorney General David Eby calls for delay in order to see how two reforms play out

VIDEO: Octopus, bald eagle battle after bird ‘bites off more than it can chew’ in B.C. waters

B.C. crew films fight between the two feisty animals in Quatsino off north Vancouver Island

Couple who bought $120k banana duct-taped to wall say artwork will be ‘iconic’

Pair compared it to Warhol’s ‘Campbell’s Soup Cans,’ which was initially ‘met with mockery’

Race to replace Andrew Scheer could be a crowded one

Many familiar faces, such as Maxime Bernier, Jason Kenney, Doug Ford and Kevin O’Leary, have said no

Owner surrenders dogs chained up outside among scrap metal, garbage to BC SPCA

Shepherd-breed dogs were living in ‘deplorable conditions.’

B.C. plane crash victim identified; witnesses describe ‘explosion’

He was a flight instructor, charter pilot and owned an airstrip before leaving Alberta

Most Read