Life Insurance, Do I Need It?

Life Insurance, Do I Need It?

Whether or not you need life insurance is something that should be given careful consideration. You will need to consider such things as: What purpose would the money be used for? How much do I need? What kind of life insurance is the best? Such questions can be overwhelming.

A licensed advisor can help you navigate through all of these matters. What is important at the end of the day, is that the advisor help you to determine what’s best for you and your family, or your business partners, as the case may be.

While not legally required in Alberta, a reputable advisor will utilize a Security Needs Analysis (SNA) to help you work through some of these questions. An SNA helps you to determine how much life insurance, if any, you require to provide the financial means to fund the things you would want to happen should you not make it home tomorrow.

There are many reasons to have life insurance in place. The death of a person generally causes an immediate need for money that did not exist just prior to the event. What those immediate needs are vary in scope and magnitude for each of us.

Let’s look at a few common needs that many people fund with life insurance:
– Pay off a mortgage or other debts;
– Pay for the funeral;
– Establish an education fund;
– Produce income streams for dependent survivors;
– Provide retirement funds for dependents;
– Pay taxes on transfer of family or business assets;
– Buy shares of a deceased business partner; and,
– To protect the co-signer of a loan.

Certainly, there are many more reasons to need cash after the death of a loved one, but these are quite common. As life changes so do these needs. Mortgages and other debts get paid off. Funerals might get pre-funded. Educations get completed. Retirement incomes get earned in, or fully funded. Family assets such as cottages get sold off or passed on. Businesses get sold or succession plans are established.

During our life times we take on obligations and responsibilities. It is comforting to know that, if we were to die tomorrow, our financial obligations would be taken care of. Life insurance is an affordable and effective way to make sure that our survivors will not have financial burdens to deal with at a time when they are already grief stricken with the loss of a loved one. Kids can stay in their own home, and go to the same school. Spouses may not have to take on a second job. Businesses can continue under the ownership of surviving partners. The right amount of insurance can truly save your dependents from financial ruin.

As mentioned above, needs change. When was the last time you completed a Security Needs Analysis? Did you consider all of the things you would want to happen if, God forbid, the unthinkable happened? Completing an SNA will help you to identify what you would like to happen, even things you may have overlooked, as well as to quantify the funds that would be needed to enable them.

At Black Edge Advisory you can expect excellent advice and assistance in this regard, backed up by the resources available through one of Canada’s largest MGAs with access to nearly all related products available in the country.