Life Insurance – To Need or Not to Need

john-mark-smith-9QTQFihyles-unsplash.jpg

Nobody said it better than MasterCard, “There’s some things money can’t buy, and for everything else there’s MasterCard.”

Let’s face it, without the proper planning in place you may have to lean on that trusty old credit card causing the potential to spiral into debt.

As you continue to conquer your finances and change the financial legacy of your family, Life Insurance is a key component and exists as the foundation to the financial hierarchy. I often ask, “If you had a hen that laid golden eggs, which would you rather protect?” In life we have a tendency to protect all our eggs, (cell phones, cars, electronics, and appliances) but seldom protect the income provider. Income protection could be a high priority on your financial journey. Let’s touch on a few key areas where life insurance may pose as beneficial.

Jumping the broom or Taking the knee (for my GOT fans)

This is one milestone where thinking about life insurance is a good idea. A life insurance policy will protect your spouse by replacing your income if you were to become an angel sooner than expected. Many households today require the contribution of both partners to sustain their lifestyle. It’s important to ensure your spouse can continue make a mortgage payment, provide for any children you might have, pay bills etc.

No debt legacy

If you’re like most North Americans you probably have no debt – kidding, kidding. Today, the average North American is spending more than they are earning. Problems associated with carrying uncontrollable debt, it costs you money, not good for your financial health and not good for your relationships. That being said, if you become an angel before expecting to that’s a lot for your loved ones to take on. Life insurance in this case is helpful to those who are left behind and are taking on the responsibility of your debt and estate. You worked hard to get where you are with your family building assets, keep it or the family.

Home ownership

Life insurance should also be a consideration if you desire to enter the real estate, housing market. Upon getting your mortgage you may be asked to opt into mortgage insurance. Now, there are many differences between mortgage insurance and a traditional life insurance policy. One difference is, mortgage insurance would only pay off the remaining mortgage balance if something happens to you, while a life insurance policy will pay the full amount of the benefit of the policy. Another is the underwriting for insurability. Traditional life insurance conducts a complete underwriting process in order to determine if you’re insurable, prior to receiving your policy, while mortgage insurance conducts their complete underwriting process at the time of submitting a claim. Having insurance to protect this asset is the number one priority if you decide to get into the market.

You have a business with partners

This one is an interesting one. In the beginning you may think we are in this business to make money, while the true underlying message is to be of service to all your current clients and those on the way. No amount of money can replace the life of any individual and having a life insurance policy on your partner(s) or the key leader(s) in your organization can help protect the business if something were to happen to you or any of the main players. The payout may help to keep the business operational and mitigate any potential losses as the company is going through this tough season.

Awareness of the inevitable

The day that was once never feared or considered has finally enter your consciousness. It rightfully had no need to enter before as you grew up watching Wonder Woman, Captain Marvel and other superhero’s. I’m invincible and will live forever. A life insurance policy can help you plan for this inevitable day that we blocked out of our consciousness. The proceeds from your policy can help cover any medical bills, any debts you may have, probate and estate fees, and the funeral, which we shall call “The Celebration of Life.” With repetition being the mother of skill, you worked hard to get to where you are with your family building all your assets, keep it in the family with the right estate planning to cover the final expenses.

Support a cause

Believe it or not, you can have a charitable organization as a beneficiary on your life insurance policy. It’s a great way to build the legacy and provide even more resources for the outreach and cause of what the organization is about. Something to consider.

Life insurance is a selfless act. There are 2 losses when someone becomes an angel, one is an emotional loss and the other is a financial loss. Many may depend on you financially you’re your kids, to elderly parents or other family members where the proceeds may supplement your income for a short duration. The proceeds are meant to replace your income, not you. At the very least, your family loves you and will showcase that love at “The Celebration of Life” event. Having enough insurance jus to help with this is a win, because your family will celebrate your life regardless and without the proper financially planning, this money will come from somewhere with the potential of going into debt.

Vanessa SmithComment