Term Life Insurance – Why You Should Start Here When Figuring Out What Coverage You Need

The future only belongs to those who stay prepared for it. And amidst a pandemic, you cannot think of any better way to stay financially protected than investing in a comprehensive term life insurance plan. We are here to help you with Life insurance in Kitchener.

Your term life insurance policy helps you to safeguard the financial future of your loved ones when you are not around to protect them. A term insurance plan helps your financial dependents to continue living a life of dignity in case of your sudden demise. As the family copes with the physical and emotional impact of the demise, the sum-assured amount ensures that the child’s education and other future plans can continue uninterrupted, despite the loss of a regular income. Thus, as a parent, it brings tremendous peace of mind to know that no matter what happens in life, your child’s dreams will not suffer due to financial roadblocks.

You are on this page because you are in the midst of deciding on Life insurance in Kitchener. With so many types of term life insurance in the Kitchener market, it can get pretty confusing at times. 

Life insurance

.Are you the sole breadwinner of your household? At which age would your kids become self-reliant? You’ll need to consider these when it comes to choosing your policy term. The last thing you’d want would be for your policy to expire when your kids are still reliant on your financial support and something happens to you. A policy that offers a payout in the event you die or if you became TOTALLY and PERMANENTLY disabled. There’s options to add to your coverage such as payouts if you got diagnosed with a life threatening illness.

 For a life insurance plan, parents can choose among several options, starting from a term life insurance that pays out a lump sum if the policyholder meets an untimely demise within the policy period, for a nominal premium. Term Life insurance in Kitchener is a more affordable and no-frills option. However, parents also have the option to opt for an endowment plan that offers a certain lumpsum after a pre-decided period. Albeit the premium for an endowment plan could be slightly higher as compared to a term plan. Both term and endowment plans allow you to customize the term length and coverage amount as per your own budget.Thus it is Affordable, flexible, and much more.

Term

It’s basically a type of insurance plan that covers you over a specified time period. This can last either through a fixed set of years, or an age cap. So if anything happens to you during the specified period, you get a payout of whatever amount you’re assured for. To be fair, term life insurance in Kitchener is the cheapest policy there is.. People usually get them just for basic financial protection during their wealth building years. Some term life policies offer additional coverage and riders for permanent disability and critical illness on top of the usual death benefit. If your family has any previous history with major illnesses, you’d want to get yourself protected as early as possible with the additional riders.

The premiums

This goes without saying… but always remember that lower premiums are not necessarily the better-value options and vice versa. Some policies allow adjustable options to increase or decrease your plan as you age. You’d want to consider a plan that gives you such flexibility in the event you’d like to extend your coverage to include any loved ones in future.

Despite the above considerations, a term life insurance is at the very end of the day, an insurance plan to help your dependents (young kids, elderly parents) tide through in the event you die. So in short, make sure you can affordably and effectively achieve that purpose. If you are interested in getting Personal Accident coverage, find out more here.

 

Here’re some factors you should consider before choosing a term life policy:

Your purpose of getting an insurance plan

Are you getting the policy plainly to protect yourself against any unforeseen circumstances? Or are you using it to build your financial wealth? The main advantage of getting a term life insurance would be their low premiums, but these plans only serve as a safety net in case something REALLY bad happens to you. They do not serve as any form of investment.

If you’re unsure of what you’re intending, you’d want to get a plan that provides options to convert your plans to whole life or endowment plans just in case. 

Know your actual value

Apart from investing in a term life insurance plan, as an individual who helms the responsibility for your family's financial future, it is equally important for you to buy a life insurance cover with the right sum assured. It is the key element for a financially secure future. You would never want your family to run short of funds for major life milestones such as education of your kids, their marriage, daily expenses and retirement needs of your spouse. This is why it is always advisable to calculate your “Actual Value” while investing in a term plan. This will help you build the right corpus to take care of every financial need of your family during your absence.

Usually, most people assess their worth on the basis of the financial support that they bring to the house, often overlooking the liabilities that they carry at the same time. With this unintentional step, they risk their family's future financial stability.

Importance of human life value concept

While calculating the sum assured for your term life insurance plan, it is very important to take into consideration the concept of Human Life Value (HLV). Generally, the Human Life Value is the present value of all future income that you could expect to earn for your family until your retirement. It is the best indicator of how much economic loss your family would suffer in case of your early demise. HLV also takes into consideration your expenses, savings and liabilities to calculate the right sum assured for your term life cover.

By calculating the Human Life Value in the right manner, you can help your dependents maintain the same living standard, pay outstanding loans and fulfil their long-term goals such as child’s higher education and marriage. The factors that need to be taken into consideration while calculating the right Human Life Value include your current age and when you wish to retire, your monthly expenses, outstanding loans, possible future expenses and current savings.

Calculating the right sum assured

A right understanding of your own actual value is directly proportional to the level of financial protection your dependents would require in your absence. In order to assess your right financial value, it is important to consider certain aspects before making a final decision on the sum assured needed. The most important thing you need to do is gauge the extent of your current protection need and determine the right amount of life cover required.

Assess your family’s needs, the financial requirements of your loved ones, your current savings, your existing liabilities such as home/car loan etc. You must also take into consideration important aspects such as an increase in annual income, a change in expenses related to lifestyle spending, and extra financial liabilities.

As a thumb rule, it is recommended to take a term life insurance in Kitchener that is around five to 10 times your annual income. You also need to ensure you purchase an appropriate amount of coverage considering your family’s situation. Last but not the least, while we prepare for the joys of life, it is important to deal with uncertainties.