Life Insurance Plans
Life insurance will help your loved ones deal with the financial aspect of your death. It is received tax free, so it can help replace the loss of your income so your family can maintain their standard of living. It can also provide for your children and their education, pay funeral expenses and pay off debt and mortgage.
Types Of Life Insurance
There are three common types of life insurance policies that are available. These are term life, whole life and universal life insurance.
Term Life Insurance Policies
A term life policy covers the policyholder for a specific term. The term may cover a timeframe from five to thirty years. It depends on the policy an individual opts for. This type of policy pays out a death benefit to the beneficiaries if the holder dies before the expiration of the term. You have the choice to decide on the coverage amount that you want, depending on your needs.
Term life can be a temporary solution or a permanent one. Let’s compare a term life policy to an apartment rental. You sign the lease for a certain amount of time. When it’s time to renew the lease, you find that the rent, or in this case, the premium has gone up. Substantially. There is no rent control when it comes to term life insurance.
Term life policies can be obtained for as little as a five year contract. They can also be contracted to age 85. At that time, insurance companies will no longer extend the policy past that age.Whole Life Insurance Policies
Universal Life Insurance Policies
A universal life policy, on the other hand, covers you for as long as the premiums are paid. Apart from the guaranteed death benefit associated with this type of policy, it is also another way to build cash value that you can borrow against.
Universal Life is more like a rent to own. You purchase a policy for a certain amount and you pay until age 100. There is an investment component, however you are still paying every year. At age 100, you own the policy.
What can life insurance cover?
Mortgage
Getting life insurance will enable your family to pay off the mortgage if you pass away. This allows your spouse and family to remain in the family home and it’s one less financial worry for them.
Childcare and Education Cost
Having a life insurance policy could offer your child the financial support they need for their education cost if you are no longer available to meet the needs.
Read more about child life insurance, here.
Funeral Costs
Life insurance can be a good way to make provision for your funeral. A policy may offer your family the funds needed to cover funeral costs for you.
Debt
Legacy
Having a life coverage policy may offer your heirs or surviving family members an inheritance. In most cases, this legacy is tax-free.
What is included in a life insurance policy?
The two main components of a life insurance policy are premiums and a death benefit. Term insurance has both, however a whole life policy or a permanent policy also has a cash value component. Universal Life also has an investment component.
What To Consider When Acquiring Life Insurance
What you need to understand with your life insurance is that you need to use your coverage to cover the following:
Your mortgage
Your personal debts
Make up for the loss of income in your family budget
Maintain your family's current standard of living
Pay your funeral expenses
Ensure your youngest child’s education is paid for
Child Life Insurance
Insuring your child with a participating whole life policy has so many benefits. To begin with, the policy has a tax free annual dividend deposited to the account every year. This allows both the life insurance to grow as well as the cash value. Your child will have life insurance to age 100 and will never have to worry about qualifying for it. The cash value is theirs to do with as they please, whether you use it for education, buying a home or starting a business. There are no restrictions. This policy is payable for 20 years, however it grows to age 100. It is also the only policy in Canada that can be passed down generation to generation.
Read more about child life insurance, here.
Life Insurance Investment & Cost
Life insurance should be a part of your financial portfolio. Whether you are using it as an investment or simply for protection, it is an essential part of your portfolio and shouldn’t be neglected.
Life Insurance can be used to cover expenses and debt, however it can also be used as an investment. There are several types of insurance that help both individuals and businesses. The costs involve the type of policy and amount you choose, as well as your age and health. This criteria will be underwritten by the carrier. Should you have a preexisting condition, you may be rated. This means the cost can be higher.
Calculating your insurance needs
mortgage +
debts +
5 x your annual income
You want to allow your family to maintain the life they had with you after you’re gone.
Your Real Life Insurance Co. Vaccine update info
We’re aware that there is misinformation circulating on social media, raising concerns that getting vaccinated for COVID-19 could negatively impact your current life or health insurance coverage or prevent you from getting new life or health insurance coverage. This is untrue.
Getting vaccinated for COVID-19 does not negatively impact your existing life or health insurance coverage in any way. Additionally, getting a COVID-19 vaccine doesn’t prevent anyone from getting new life and health insurance coverage with Manulife.
We continue to follow guidance and recommendations from the World Health Organization and the Canadian government, including supporting government-approved vaccines to combat COVID-19.
The basic idea of having life insurance is to guarantee a tax-free amount to your beneficiaries, whomever you choose, to help them cover your financial alignments if you pass away.