The best reads in personal finance, investments and insurance from the week of Dec 7-13, 2013.
If you are one of the millions of Canadians whose employer offers a group benefits plan with life insurance coverage, you may be thinking if individual life insurance is still needed to protect your family. In this post I'll outline some of the basic differences between the two products so that you will have a clearer picture on whether or not you should buy individual life insurance.
The best reads in personal finance, investments and insurance from the week of Nov 30-Dec 6, 2013.
Most people with a family dependent on their income know that life insurance is an important part of their overall financial plan, but few know how much coverage they actually need. Some life insurance agents swear by a formula, such as 8 times of salary, or a flat rate of half a million for everybody. But it’s most likely that these ‘methods’ of determining your life insurance needs are inaccurate. Instead, they are fabricated by the agent to simplify his life by not having to perform the calculations manually. So what is the right amount? Thanks to software provided by the life insurance companies, all it takes is a few minutes to determine the life insurance coverage that you need. They are typically all very similar, prompting you to input cash and income needs at death, and sources of cash at death. It then adds these amounts together to output your total coverage required.
The best reads in personal finance, investments and insurance from the week of Nov 23-29, 2013.
The main argument against term insurance is that premiums often increase dramatically at renewal, becoming up to five times as expensive at the first renewal and up to one hundred times the initial premium at the final renewal. The premium increases do not reflect the increase in an individual’s income. On the other hand, permanent insurance is likely to be too expensive initially, beyond the means of the average consumer. There appears to be room for an intermediate product that has neither the outrageous renewal increases of term nor the staggering initial costs of permanent insurance. PPI Solutions, along with Assumption Life, came up with a solution, called LifePhases and LifePhases Plus.
When it comes down to purchasing life insurance to protect your family in case anything should happen to you, it really comes down to two options: term and permanent. While the last couple of posts focused on what the common uses of each are, this one will apply an objective view to pit term versus permanent life insurance to see which one is most suitable for you. The debate between term versus permanent life insurance continues here.
Permanent life insurance has long been compared to term life insurance in terms of suitability and usage. While some favour term, permanent has its own set of benefits and uses. In this post we highlight permanent life insurance and its 5 most common uses: final expenses, investment/insurance hybrid, legacy, estate equalization, business applications.
Most people, when they think of life insurance, don’t picture a policy with cash values, investments, and so forth. They envision life insurance simply as straight forward as paying premiums in exchange for a death benefit when they die. This is exactly the principle of term life insurance. As part of a series of posts covering the basics of life insurance, in this week’s topic I will cover the 5 most common uses of term life insurance: final expenses, specific family need, income replacement, business applications, conversion to permanent.
Five important points to keep in mind when thinking about purchasing life insurance. Know why you're buying it, how much coverage is needed, whether to buy term or permanent, choosing additional options and affordability. There is no "perfect policy" that is suitable for everybody. The only perfect policy is one that is in force at the time of death of the life insured. Start by discussing with your family what your objective is for purchasing life insurance, and speak to a licensed insurance professional about your different options.