Protect Your Family

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Protect your family with Life Insurance

Your top priority if you have dependants is to ensure that they are protected financially if you were to die or be unable to work for a prolonged period. Here we concentrate on the role that life insurance can play in your financial plan.

Bear in mind that not only the loss of a breadwinner’s salary could cause financial hardship: if you are caring for children, your spouse or partner might need to pay for professional childcare and/or babysitters if you were to die.

Similarly, you should take into account any extra costs of running the home, maintaining the garden, and so on. A nation-wide government survey found that housework, still done mainly by women today, takes up more hours each day than paid work.

How much life insurance is required for my family?

Having identified that you need some life insurance to protect your family, the next step is to work out how much. You might require a lump sum, for example to pay off the mortgage, as well as replacement income, which could be provided by life insurance which pays out a lump sum which you could invest to produce the required income.

Are Canadians Under-Insured?

According to the Canadian Life and Health Insurance Association, more then 20 million Canadians are protected by life insurance with an average amounts owned were $156,200 for insured individuals and $312,200 for insured households.

That leaves approximately 30% of individuals without important insurance protection as well insured households only having an average amount of $312,200 of life insurance, this could represent many families being under-insured in Canada.

Creating awareness around the need for life insurance is paramount there are many brokers and insurance agencies in Canada available to help with your insurance needs, call a insurance professional whether you are protecting your family your business there is help out there.

Author: Peter C. Choma an insurance specialist with Solutions Financial

Reference: Canadian Life and Health Insurance Association. 2008 Edition of Canadian Life and Health Insurance Facts http://www.clhia.ca/e3a.htm

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.