Life insurance can mean the difference between a family being dependent on the government for financial support or becoming self-sufficient after the provider of the family passes away. Many families who loses a loved one are not able to recover from its financial implications. Immediate expenses such as burial costs and legal fees coupled with the long term income requirement for living expenses can devastate a family financially. It may take years for the survivors of a family to recover from the death of the breadwinner of the family. Oftentimes, full recovery is impossible as a single parent is unable to keep up with the cost of raising a family alone. They may need to downsize their home, take out additional loans, cease contributions to education and retirement savings plans and do other things that reduce their standard of living just to get by.
With that being said, why are Canadians still taking the risk of remaining underinsured? Are they unaware of the risks that they are exposing themselves and their families to? Is risk management not part of their financial plan? Are they focused on other financial goals such as debt reduction? Do they think that the cost of life insurance is higher than it actually is? Or do they think that premature death will never happen to them? These are just some of the reasons why Canadians ignore life insurance. Sometimes the reasons may be valid. More often than not though, they have been misinformed about one or more aspects of life insurance. Which is why September is Life Insurance Awareness Month, to debunk the myths of life insurance and raise awareness to underinformed individuals.
The purpose of Life Insurance Awareness Month is to get people to start talking about life insurance and include it as part of their financial plan. It’s about making life insurance a priority and having the conversation with loved ones about insurance. It’s also about busting life insurance myths so that the average consumer thinks about life insurance without any bias. After all, it’s difficult to have a meaningful discussion about a topic with preconceived notions rather than facts.
What Life Insurance Awareness Month isn’t about is knowing the fineprint of insurance policies. It’s not about knowing how to execute an insured annuity strategy, or transferring wealth to the next generation using life insurance. Knowing the basics and having the conversation is the focal point. Start browsing websites such as the non-profit organizations Life Happens and Canadian Life and Health Insurance Association to grasp the basic concepts of life insurance. When you’re ready to take the next step, you should speak with a licensed insurance advisor. A qualified insurance advisor will be able to help you understand the difference between term and permanent insurance, calculate how much insurance you need and which type of policy is suitable for you.
At the end of the day, it’s up to you to take initiative. So don’t procrastinate, do what’s right for you and your family, and start talking about life insurance.