Which Type Of Life Insurance Is Best For You?

In regards to life insurance there are two basic types, one being term and the other permanent. Term insurance provides life insurance for the amount of time that the policy holder specifies. If the insured dies within the specified time, the face value of the policy will be given to the beneficiary, however if he does not die within that time span and the policy is not renewed, then nothing will be paid out. Permanent life insurance on the other hand, provides insurance protection for the policy holder’s life span, as well as a savings element. There are two common types of permanent insurance: whole life insurance and universal life insurance.

Permanent is more expensive to own than term insurance, however, you should let your family’s need be the determining factor in deciding which type of insurance is best for you, rather than the price.

You have probably heard arguments about how term policies are the better deal or marketing hype regarding cash value policies, but what it really comes down to is each person’s individual situation.

The Importance Of Life Insurance For The Stay-at-home Spouse

The loss of a stay-at-home parent is emotionally devastating for a family. Unfortunately, it can cause serious financial difficulties, as well. That’s why it’s important for stay-at-home spouses to have life insurance protection.

Some families choose to have one parent work outside the home while the other stays home to take care of children. Other families are forced into such a situation by limited childcare availability or other circumstances. In either case, most people would agree that the wage earner in any family should have life insurance protection. After all, how would the family survive without a breadwinner’s income?

What about the Spouse at Home?
If something were to happen to a stay-at-home spouse, it would be emotionally devastating for the surviving spouse and children. There are, of course, many emotional repercussions of such a tragic loss to a family. But there could also be a tremendous financial impact, as well.

During the difficult adjustment time, there could be a real need for someone to help out in caring for the children and home. Often, friends or relatives will step in to assist during the first few crucial weeks. But eventually, they will need to return to their regular lives — and the surviving spouse will need to return to work. At that point, the only recourse may be to hire professional services. And this could present a financial hardship.

The Value of the Homemaker
While everyone recognizes the vital role of the family homemaker, few people stop to think about the literal value of the services performed by the stay-at-home spouse. This includes childcare, looking after the home, preparing meals, and many other time consuming activities, like carpooling, laundry and grocery shopping.

Today, the cost of childcare for preschoolers in this country can be as high as $8,840 a year, depending on where you live.1 It’s even higher for infants and toddlers. The financial equivalent of the vital services a stay-at-home spouse provides can amount to tens of thousands of dollars a year.

That’s why it’s important for a stay-at-home spouse to have his or her own life insurance protection. It’s hard enough for a family to deal with the emotional repercussions of losing a parent/spouse. It shouldn’t be compounded by having to grapple with the financial hardships such a loss can bring, as well.

How Much Life Insurance Do You Need?
There are no hard and fast rules for determining how much life insurance is enough, because no two families have exactly the same needs or resources. As a general rule of thumb, though, the appropriate amount of insurance protection could equal up to an individual’s annual salary times the number of years before the youngest child is out of college, depending on other available income or resources. When calculating an amount for a stay-at-home spouse, the annual financial value of the services they provide should be used.

Let’s say you determine that the financial value of the services a stay-at-home spouse provides for your family equals $50,000 a year. If your youngest child will finish college in 15 years, the appropriate amount of insurance protection for the stay-at-home spouse could be as much as $750,000, depending on other available income or resources. Some other things you might consider in determining an insurance amount include funeral costs, medical expenses, probate fees, estate taxes and inflation

Don’t Overlook the Homemaker
It can be very easy to overlook the financial contributions of a stay-at-home spouse — that is, until the person is gone. If you or your spouse decide to remain at home to care for your children, don’t forget that the contribution of the stay-at-home spouse can equal tens of thousands of dollars a year. The loss of a parent is hard enough on a family; purchasing insurance coverage for a stay-at-home spouse can help ensure that it doesn’t become a financial hardship as well.

Mortgage Life Insurance

At Solutions Financial, we don’t insure your mortgage. We insure you. After all, you’re the one making those mortgage payments. Through a personal life insurance policy, you can plan to meet more of your family’s needs in the event of death – including living in that dream home. We offer free, instant, online life insurance quotes from many leading Canadian carriers, and can help you purchase the most affordable policy that best meets your requirements. Mortgage life insurance does not have to be purchased from the lending institution! We offer superior and lower cost life insurance!

Are you planning to provide a financial safety net for your loved ones? Are you purchasing a new home? Are you a first time home buyer planning to arrange your mortgage life insurance? Do you simply want to add some coverage to what you currently have? You’ll want to make sure you choose the most appropriate type of coverage and get the best rates.

You are not obligated to buy mortgage life insurance at your lending institution!

Here are some of the reasons you may want to find an alternative to standard mortgage life insurance which is purchased through your lender.

With mortgage life insurance, while the monthly premium is generally locked in to the age of the older insured person, the amount of the payout shrinks as the mortgage is paid down. What does this mean for you? The cost of mortgage life insurance becomes more expensive as every week passes! With our low-cost solution, upon death your beneficiary receives the full amount of coverage, yet the premiums remain very competitive with the premiums that the lender can offer! If you are over 30 years of age and a non-smoker, your premiums just can’t be beaten by the lender!

With mortgage life insurance when you die, the lender receives the proceeds. You cannot assign anyone else as beneficiary, including family members. With our solution, you appoint a beneficiary who can use the proceeds in which ever manner he/she wishes. If it is wiser to invest the proceeds rather than pay off a low interest mortgage, the beneficiary has the choice. If your family does decide to pay off the mortgage, they can keep the balance of the proceeds.

With any change to a mortgage document, for instance: refinancing or a change of address, this opens the door to collapsing the mortgage life insurance agreement with the lender. You are then required to reapply for insurance, and rates increase with age. If your health is poor at that time, the application may be turned-down, leaving you with no protection. With our solution, your protection is guaranteed for the full length of the term, regardless of any change of age or in your health. It is also completely independent from any changes made to your mortgage, including refinancing or transferring the loan to any other lender.

Mortgage life insurance is marketed with a specific need in mind. That need is paying off a major debt like a mortgage. The amount of your mortgage life insurance may represent only a part of your overall financial family responsibilities. Call Solutions Financial and speak with a Financial Security Advisor to determine if you are overpaying for protection, or to determine if you are protected appropriately.

Watch CBC Marketplace – “In Denial” – This segment from CBC Marketplace on February 6, 2008 provides you with concise information about bank mortgage insurance and the reasons for consumers to purchase their insurance through a licensed broker.

7 Reasons You Might Need More Life Insurance!

Do you have enough life insurance coverage? In many cases, there’s a major gap between the amount of life insurance coverage you need and the amount you have.

As you reach different stages in your life, your life insurance needs will change. If you fail to update your insurance policy as your life changes, you could find yourself grossly under-insured.

Reason #1: You own a home

If you’re planning on purchasing a home or refinancing your mortgage, protect your investment with life insurance. If you’re unsure about purchasing insurance, ask yourself this question: could your family make mortgage payments without you?

Reason #2: You’re in debt

Your life insurance may be enough to cover your mortgage, but what about other debts? In the event of your demise, term life insurance could be used to pay personal loans, credit card bills, student loans and any other day to day expenses.

Reason #3: Marriage

If you have a spouse, chances are you are sharing the financial responsibility. Life insurance can serve as income replacement to help your spouse pay the bills and preserve the same standard of living.

Reason #4: A new baby

Having a baby is a wonderful time for parents, but it can place an incredible strain on a family’s finances. Raising a child is very expensive. If one income is lost, could the surviving parent maintain your child’s current standard of living? Would there be adequate funds to provide your child with the education you want to provide?

Reason #5: You buy a bigger home

A bigger home usually means a larger mortgage. Make sure you increase your life insurance coverage.

Reason #6: A new job

Even if your previous employer offered life insurance benefits, you likely had a separate life insurance policy. Your new employer may have benefits, but how much? Your employer’s coverage may not be sufficient to cover your family’s financial needs. Starting a new job is a good time to evaluate your life insurance needs.

Reason #7: You become widowed or divorced

If you’re a widow or divorcee, you’ll likely need to re-examine your life insurance needs. You may have lost life insurance coverage you previously had with your spouse. Make sure you update your coverage if you’re divorced or widowed.