Why you need life insurance

If you have debts – or people who depend on you financially – you likely need life insurance.

Life insuranceLife Insurance Insurance that pays cash to your family or other beneficiary after your death. This can give them income and help pay your funeral and other final costs.+ read full definition can help ensure that your family will be able to maintain their lifestyle if you were to die unexpectedly. The tax-freeTax-free Money that you do not pay tax on.+ read full definition life insurance payment that is made upon your death can be used to:

  • replace some or all of your income,
  • repay debts or continue debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition repayments on mortgages, loans and credit cards,
  • pay for child care and any current or future education costs for your children, and
  • cover your funeral and estateEstate The total sum of money and property you leave behind when you die.+ read full definition costs, such as probateProbate Fees to settle your estate after your death. The probate process includes reviewing your will to ensure it’s valid. Also includes paying any debts and giving your money and property to the beneficiaries you have named in your will.+ read full definition fees and capital gains taxes that may be due on death.

2 questions to ask yourself

  1. If you are a main or co-breadwinner, will your family still have the money they need to cover day-to-day expenses if your income is lost?
  2. If you are a full-time caregiver, will your family be able cover the cost of child care if you’re gone?

If you answered “no” to either question, consider life insurance to help protect your family financially.

Calculate your life insurance needs

Most insurance companies have calculators on their websites.

Warning

Probate fees and capital gains taxes can be substantial. Factor them in to your insurance planning.

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