Do you know how much you should have saved up by the time you hit your retirement age? A whopping average of $756,000, that's how much.
Of course, if you're a millennial, you'd need more, somewhere around $917,000. Those over the age of 55 now need something less ($518,000) to live in comfort during retirement.
You're probably thinking that it's too early to even worry about retirement. But when it comes to saving, there's no such thing as too early.
That's why there's no other better time than now to ask the question, "Do I need life insurance?"
For one, because if you're like one-third of Canadians, you don't have coverage for serious life events. Second, if you don't have retirement savings (also like a third of Canadians), then you're at even more risk.
We'll cover the why's and how's of life insurance below, so keep reading!
Do I Need Life Insurance?
The best way to answer this is to answer the question, "Why get life insurance in the first place?"
Doing so will help you determine whether you'll get great value for this policy.
First Reason: Protection from Expensive Funeral Costs
Life insurance protects your loved ones from the financial burden of your passing. Granted, no one wants to think about their death, but it's more problematic if you don't prepare for it. You may be young now, but it's an inevitable occurrence you should plan for as early as possible.
Especially with the kind of costs associated with funerals today. Cremation alone can already cost somewhere around $1,200 to $5,500, and that's without tax yet! Casket prices average about $3,000 apiece.
The bottom line is, dying is expensive, which is why death in Canada is a $1.6-billion industry.
Now, ask yourself if the people you'll leave behind can cover these costs with ease. Even if they can, would you be okay putting even more burden on them as they're already grieving?
You don't, which is why you'd want to take out insurance ASAP.
Second Reason: To Ensure You Don't Leave Financial Obligations Unmet
In Canada, two-thirds of people under 40 who graduated with a diploma or degree did so with student debt. At the time of their graduation, they still owed somewhere around $22,000. In 2015, Canada Student Loans Program debts alone totaled $19 billion.
Those figures don't even include consumer loan debts in the country. Including mortgages, Canadians owe a total of $1.821 trillion in debts as of 2017. Without mortgages, the average debt per person in the country is $22,837.
Our point is, you don't want to pass your financial responsibilities to your loved ones after you pass away. Your passing alone will already place a huge toll on them. You don't want to add to that burden, which is why life insurance makes complete sense.
Third Reason: Take Care of Your Family Even After You're Gone
A life insurance policy's death benefit can help keep your family's finances intact even when you're gone. This is even more important if you have a newborn, young kids, or teenagers.
Why? For the simple reason that you want to protect your little ones' futures. There's also the fact that raising a child in Canada continues to become more expensive each year.
Back in 2015, the U.S. Department of Agriculture said that it'll cost US$250,200 to raise a child born then. In today's CAD, that's more than $328,000. If we use this estimate, it means you'll spend at least $18,200 on your child every year until they turn 18.
As you've noticed, that number doesn't include college tuition fees. If you were to help your kid get into and stay in college, prepare thousands of dollars more.
So, imagine how bleak your children's future will be if you passed away leaving them nothing. Your spouse may be able to make ends meet, but living in financial difficulties is not a good way to live.
The good news is, you can use a life insurance policy to ensure this doesn't happen. You can tailor your policy based on what you think your kids' future expenses will be. If you can afford it, put in some extra to help them pay for college.
Fourth Reason: You Can Leave Your Loved Ones with a Nest Egg
Some life insurance policies also come with an investment option. These are the universal and whole life insurance. They come with a savings component, which increases and builds up over time.
Once it reaches a certain amount, you can even withdraw against it. That means you get to enjoy your life insurance while you're still in this world! If you don't, and you pass away, your family will still benefit from it, aside from the policy's main payout.
When Should I Get Life Insurance?
Now that you know how valuable this insurance product is, the next question is, when should you get one? Again, as soon as possible is the best answer.
One reason is that life insurance depends a lot on your age. So, if you're wondering how much is life insurance, it's way cheaper if you buy it at a younger age.
That's because insurers have this concept that the younger you are, the lower your death risk is. It follows that the older you are, the greater your risks of dying.
The second reason is that you can never predict what will happen to you later, tomorrow, or the next month. Keep in mind that road crashes alone lead to 160,000 cases of accidents in the country every year. These unwanted incidents claim 2,800-2,900 lives.
All these should tell you that getting life insurance is best done as early as you can. This way, you can ensure your family is better protected in case of your sudden passing. The fact that it's cheaper the younger you are is a welcome bonus.
Get a Life Insurance Policy for Peace of Mind
By now, you most likely have answered your question, "Do I need life insurance?" with a yes.
The next thing to do is to start exploring all your options. Shopping around and comparing offers is key to getting the best policy for you and your family.
Once you're ready to take out life insurance, we can help. Connect with us now so we can assist you in finding the most affordable insurance rates in the country.