ACTS University

Life Insurance

Why do I need Life Insurance?

There are many reasons for buying life insurance. If you're the primary wage earner in the family, life insurance is a good way to help provide your family with a stable financial future. If you aren't the primary wage earner in your family, it's important to have insurance to help cover the financial burden of childcare, funeral expenses, and other unforeseen costs.

While it's difficult to face our own mortality, planning for it can ease the burden our loved ones will face later. Purchasing life insurance can help make a difficult situation easier by providing death benefits for:

Unpaid medical bills
Income replacement for survivors
Final expenses like burial costs
Unplanned or emergency expenses
Your mortgage balance
Future education funds for your children

Remember, you can also use some life insurance products:

To help you establish an estate plan
As a component to your savings strategy
For retirement income
Even to pay for estate taxes

How much do I need?

Every person has a different idea of what financial security means. If something should happen to you, how much money would your family need? You should consider:

Your current debt
Expenses your family can expect to pay after your death
Your family's future needs

A general rule of thumb to calculate your life insurance needs is to multiply your annual salary by seven.

Types of Life Insurance

Term insurance
Term life insurance provides protection for a limited period of time and pays benefitse only if you die during the specified term. Term life is easy and affordable. You simply have to choose how much insurance you need (face amount), what type of premium you would like to pay (level or increase), and how long you need it for (term), then buy a policy that matches your needs. Payout is made if the policy holder dies during the specified term.

Whole Life Insurance
Whole life is a type of permanent life insurance. Its advantages include guaranteed death benefits, guaranteed cash values, fixed and guaranteed premiums. Whole life insurance is the best solution for consumers looking for insurance with a tax-deferred investment without the need to manage it. If you are looking for life insurance built on a foundation of stable investment returns from year-to-year, whole life insurance may be the right product for you.

Universal Life Insurance
Universal life is an all-in-one product that combines life insurance with a tax-deferred investment account. Its advantages include greater premium flexibility, potential for higher internal rate of return, cash value is considered more attainable since the owner can discontinue premiums if the cash value allows it, and there is more flexibility for the death benefit payout.

Critical Illness Insurance

Critical illness insurance provides tax-free money if you're diagnosed with and survive a critical illness (e.g. cancer, heart attack, stroke, blindness, Multiple Sclerosis, Parkinson's etc.). You are able to use this money for any purpose.

Disability Insurance

Disability insurance can provide you with financial security by placing a portion of your earnings when an accident or illness causes you to become disabled and unable to work or earn income. Disability strikes far more than premature death. This type of insurance covers both temporary and long-term disability.

Long Term Care Insurance

With long-term care, you can take control over the quality of your care and eliminate many out-of-pocket expenses. It also provides comprehensive coverage for nursing home care, should you need it. It provides a daily benefit when your doctor states that you are unable to perform at least two out of six daily living activities or if you have become cognitively impaired (by Alzheimer's, for example).

Mortgage Insurance

Mortgage Life Insurance provides you with peace of mind by helping to protect your family's home for the life of your mortgage. In the event of the owner's death, your outstanding mortgage would be reduced or paid off without burdening your family.

Travel Insurance

Why do I need Travel Insurance?

Health care costs in Canada and many countries abroad are very expensive. You will be charged on a tremendous amount of bill if you are hospitalized. Canada does not pay for hospital or medical services for visitors; in many cases hospitals will not admit patients without proper travel medical insurance.

Citizenship and Immigration Canada recommends all visitors to Canada purchase health coverage when they arrive in the country.