Don't Have Life Insurance? Find Out Why You Can't Live Without It.

Life insurance is critical for ensuring a sustainable future for your dependents. While Canadians are some of the highest purchasers per capita of life insurance (70% of Canadian fathers have a life insurance policy), Gen Y consumers are the least likely to own life insurance; however, according to a Financial Post article, when pressed, four in ten Gen Y households claim that they would have immediate trouble meeting everyday living expenses if a primary wage owner were to die. And while the percentage is high among Canadian dads who own life insurance policies, many have no clue how much the policy is worth or how much they actually need.

If you haven’t considered life insurance already, believing you’re too young or too healthy or just think it’s a trivial thing to do, here are 6 reasons for getting coverage as soon as possible:

1. Your going to die: This may sound grim, but it is a fact of life--and we all know it.
2. To protect your family and loved ones: Life insurance is also known as 'income protection'--it protects your spouse, children, and all those who rely on your income in the event of premature death.
3. To pay off debts and other expenses: In addition to replacing income, your family may require money to cover off any outstanding debts, like mortgage, credit cards, and car loans--not to mention funeral and burial costs. You don't want your spouse and children rattled by financial stress while in the throes of grieving.
4. Financial security: This is simply the ability to provide the opportunities your spouse and children deserve in your absence, whether it be university tuition, or starting an enterprise, or getting off on the right foot in marriage.
5. Bring peace of mind: Let's face it, unless otherwise, we don't know when we'll go. We think we are invincible, but we are merely mortal. Life insurance will bring you peace of mind knowing that should such a tragedy as your death occur, your spouse and children, and other dependents, will have the means to keep or improve their current standard of living.

So let’s say you decide to purchase life insurance, how much do you need? Many financial advisors maintain that the primary wage earner should take out a life insurance policy worth eight to ten times more than his or her annual income. Moreover, it is important for both spouses to take out life insurance policies, given the financial demands already outlined above.

What kind of life insurance policy do you need? There are two main types of life insurance: permanent and term. Permanent, including whole-life and universal-life, combine insurance protection with a savings element. However, due to the low interest rates on such policies, it is more beneficial to take advantage of the low cost of term insurance, and invest your money elsewhere.

Term insurance provides insurance coverage for a predetermined number of years. It is also inexpensive and the rates are priced competitively among many insurance carriers, giving you the power to shop around for the best rate. Many companies will issue, for example, a $100,000 policy to a health thirty-five year old male, non-smoker, for an annual premium of less than $180, or only $15 per month. 

These low rates make it possible for anyone to get the insurance coverage he/she and dependents need at an affordable cost. A good rule of thumb is to get as much term coverage as possible for as many years as possible, for example twenty to twenty-five years.

Don’t put your dependents at risk. Give them, and yourself, peace of mind. If you haven’t already, talk to a life insurance broker today and get covered.