Our situations are ever-changing as we progress through the stages of life, from going to university and starting a career and family to retiring and ensuring our family is taken care of through our estate. Our goals shift depending on what and who is most important to us at these stages. As we progress through life, our insurance should also be adjusted accordingly.
Roughly 40% of Canadians are uninsured as they don’t know how much or what kind of life insurance to purchase. An easy way for me to explain how to calculate an individual’s insurance needs is by using the acronym LIFE:
- L – Liabilities (mortgage, car loan, consumer debt, etc.)
- I – Income Replacement Needs (replacing your income for ongoing expenses to maintain the lifestyle for the surviving partner and dependents)
- F – Final Expenses (funeral, life celebration, casket, ceremony, taxes, etc.)
- E – Education Expenses (paying for your children/grandchildren’s education)
You add these expenses together to understand your approximate life insurance needs. If you want to leave money to a specific charity important to you, you can add that amount to give you a final life insurance total.
You can work with an insurance advisor to refine these numbers and create a plan and strategy for the type of insurance needed to accomplish your goals most efficiently. Other considerations would be resources available to your family should you pass, which include savings and investments, existing insurance coverage (through work or other policies), pensions, and other government benefits.
Contact me today to learn more about LIFE and how it could benefit you and your family.
Wealth and Insurance,