You Do Not Need to Be Concerned about Your Health
You have seen the ads and commercials over and over again—guaranteed life insurance regardless of health; you will not be turned down for any reason. But, these policies come with a catch—because of the larger risk on the part of the insurer, you will have to pay very high premiums; the coverage amounts are usually not very big—often times, the only real use these policies serve is paying for funeral expenses. Furthermore, the payouts in the first two years will be very limited. If you are considering this type of policy, you should shop around a bit more to see if you can get a more standard policy. Or, start shaping up so you are in a better position to get a better policy at more favorable rates—while there are lots of things that you may not be able to change, many factors that up insurance policies are within your control, such as losing weight or quitting smoking.
Stay At Home Spouses Do Not Need a Policy
When we think of life insurance, we tend to view it as replacing our income should we die and nothing more; but, it is not something just for the breadwinner. We often grossly underestimate the contributions of stay-at-home spouses and their impact on our financial situation. You would be surprised at the expenses that may come from losing a stay-at-home partner. You may need daycare, or for you work-a-holics out there, hired help to handle cooking, cleaning and running errands. It is important to think about the other person’s contributions to your life together, even if they are not bringing home a paycheck.
You are Better off Investing
When it comes to whether to purchase term life insurance versus whole life insurance, many advise against the latter as a form of investing; it is strongly suggested you to put your money elsewhere. They view insurance as insurance and not a vehicle for investments. But, when it comes to buying any sort of life insurance versus investing, this is a whole different story. While people can make oodles of money investing, there are no guarantees and you can stand to lose everything—not the best strategy for providing for your family should you die. If you currently do not have enough money and liquid assets to cover your debts and provide reasonably for your family, you should get a policy. If at some point in the future, you amass enough money on your own, then you can reconsider your life insurance.
Kelli Cooper is a freelance writer who covers a variety of insurance and personal finance topics; if you are looking for a policy in Canada, visit the Kanetix insurance information hub for more information.