Why Life Insurance is a Bargain

Posted on June 29, 2017 and updated January 22, 2019 in Life Insurance Canada News 6 min read
  • 2
  •  
  •  
  •  
  •  
  •  
life insurance bargain

The cost of living drains every penny we have. The average Canadian lives from pay cheque-to-cheque. When striving to make ends meet, the added expense of life insurance premiums seems like a luxury we can do without. The truth is, life insurance is not a luxury, it is a necessity and the potential cost of not buying insurance can be devastating.

Sometimes we get so focused on putting out the immediate fire that we forget about the embers that may be ready to spark in an another area. We are so concerned about everyday life that we put off planning for the future. There are two main priorities in everyone’s life: family and retirement. Life insurance addresses both of these concerns.

The Hidden Bargain

Tragedy can strike at any moment. Not too many people know when they will die, but we all know that it will happen someday. We also know that our family will be in great distress emotionally and financially if we die unexpectedly. Life insurance can take care of the financial aspect, which will take a huge load off their shoulders.

Many people don’t buy coverage because they think it costs too much. It is actually far less expensive than you may think. The 2016 Insurance Barometer Study, by Life Happens and LIMRA showed that 8 in 10 people overestimate the cost of life insurance. In fact, a 30 year old, healthy male can be approved for a $250,000, 20-year term life insurance policy for only $13 a month. That is a considerable bargain for piece of mind and financial security for your family.

Enjoy the Benefits Yourself

Life insurance isn’t just about securing the financial future of your loved ones. You can enjoy the benefits while you are still alive. If money is not a factor, consider the benefits of whole life insurance. This is money you can use during your own lifetime.

The premiums on permanent life insurance policies are typically higher in the beginning, but it is well worth the cost. You have coverage for as long as live, plus you can accumulate tax-deferred cash value. You can use the accumulated cash value anyway you like, including a nice retirement income.

Before retirement, a whole insurance policy can act as collateral or you can borrow from the fund directly. When borrowing, the rates are generally quite low and you are not subject to credit checks or other restrictions. Technically, you should repay the loan, but if for some reason you can’t, benefits left to your beneficiaries will be reduced.

Disability Insurance

Generally speaking, people are much more likely to become ill, injured or disabled than to die prematurely. People believe their employee benefits will take care of that, but what if you lose your job or the company goes under? In these times, you can not rely on company benefits, you have to take care of yourself.

Even a mild injury can put you out of work for a month or more. How much of your monthly expenses will company policy cover? What if you need home care or special treatment? Our Canadian Health Plan covers most of these costs, but not all. In some provinces, many of these extras come out of your own pocket.

Disability insurance ensures you and your family are not put under any financial difficulties. You will continue to receive an income until you are able to return to work.

Hoping and praying that misfortune doesn’t touch your family is one option, but getting adequate protection is much more feasible. It truly is a bargain in disguise.

Dollars for Pennies

In the insurance industry, we sell dollars for pennies. This is a concept that was first brought forth by the great,Ben Feldman (an American businessman and one of the most prolific salespeople in history). But, on top of these dollars, we also give you piece of mind, financial security for your loved ones and the option to grow your money in a safe environment – no penny jar will give you all that!

The pennies are collected every month, or year if you are on an annual plan, and the dollars are delivered when you need them most. This could be in the case of your death, disability or an outstanding business opportunity. You can really appreciate the benefits of life insurance when you compare the cost of annual premiums with the ultimate benefit.

Why Would a Billionaire Need Life Insurance?

In the days of our grandparents the plan was to work hard, pay off the house and die before retirement age. This is no longer an option. Most Canadians can’t pay off their mortgage before they retire so they end up working well past the government designated age of retirement. This is partly due to people living longer and the cost of housing going through the ceiling. Our generation will have a hard time getting a mortgage, never mind paying it off in our lifetime, so life insurance is crucial.

However, there are also many millionaires and billionaires living in Canada. They have enough money in petty cash to buy a house outright, so why would they need life insurance?

According to the Guinness Book of World Records, a California billionaire bought a life insurance policy for $201 million dollars. No one company could handle a policy of this size, in case of a payout, this would mean a sure bankruptcy – 19 different insurance companies had to collaborate to guarantee the benefit.

The big question is, “Why would someone with a billion dollars in cash and assets need a life insurance policy at all, let alone one for $201 million?”

The answer – because it could potentially provide a great tax shelter!

There are many benefits to having life insurance. The majority of the population doesn’t even know half of the actual value. Contact us for more details about how much of a bargain it really is to own life insurance.

avatar