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Personal Wealth and Finance


How can Life Insurance protect my family?

February 1, 2021

Copyright AdviceOnMedia®

Foundational Financial Protection

Life insurance has provided families with basic financial security for well over 100 years. For example, a healthy, non-smoking 30-year-old male can purchase up to $500,000 worth of insurance for as little as $50 per month. That life insurance policy would pay out a death benefit equivalent up to 10,000 times the amount of one monthly premium payment.

$500,000 could provide your essential necessities such as groceries, shelter, home repairs, means of transportation, and education for dependents. In this sense, the value of life insurance is tangible. Contrasted against the assets and services such a large death benefit can purchase, we realize how small the premium cost really is.

When does life insurance begin covering my family’s financial risk?

Even if death occurs one day after the initial premium payment, the full benefit is payable tax-free, thus instantly creating new capital, sometimes far exceeding the insured individual’s net worth. Most accountants and financial advisors agree that life insurance is the foundation upon which families with dependents should build their financial security.

An immediate cheque solves a family’s financial security.

Life insurance, in addition to savings, is designed to immediately provide the capital necessary to create ongoing investment income for dependents after income taxes and other liabilities are paid.

When you are not financially independent 

Life insurance can make up the shortfall when investments assets have not yet grown to the extent that your net worth enables you or your heirs to live in total financial independence.

When your health is not the best

Many people who are not in perfect health are surprised to find that they can also purchase life insurance to ensure their financial security.

Note: Life insurance premiums vary according to the policy type, and in some cases, paying a little more premium offers enhanced benefits and some offer tax-deferral strategies.

 

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