Why do you need life insurance?

Author: Yong Chen (Senior Financial Advisor, Cell: 4163004768)

Why do you need life insurance?

During my life of career as a Financial Advisor, I met a lot of persons who didn’t want to buy a life insurance, even a term policy. They could find lots of excuses to reject life insurance. However, I have to say life insurance is a very important financial product for any persons and any families. It is a fundamental part of family financial plan. I like to tell you some reasons why you need life insurance.

1\\How do you protect your family and loved ones in finance in case of any bad things happening on you?

Do you need to make money to support your family? Where does your family get money to support their livelihood, such as paying rental fee or mortgage loan, food, clothes, transportation, education and others if a money-maker dies early. Life insurance will be a very good income replacement when you die due to any reasons like accident, sickness, etc. Can you imagine what would happen if you don’t have a life policy but you die in an accident? There is a saying “misfortune is not alone”. You know, if no money, your family will lose residency to be homeless, have no food and no enough warmly clothing and then get sick even other bad results.

You might say you are only a homemaker. Actually, homemaker is a very important part in a family, because she or he takes care of kids, does house works to support the other one to make money. If you die, the money-maker wouldn’t be able to focus on his or her job. He or she has to hire a person to take care of your kids or other family members, or has to send your kids to childcare or other institution. That will lead to your family’s expenditure increasing. He or she also need to pay for cleaning, laundry, cooking and other house works. Where does he or she get those money if you don’t have a life insurance? Could you imagine what kind of chaos and misery your family and kids will fall into?

So life insurance is same important to a homemaker as to a money-maker.

2\\How do you prepare to cover your mortgage if any incident happens to you?

Usually the bank asks their clients to buy a “mortgage insurance” (it is a term policy or a YRT life insurance) that would provide death benefit to cover the mortgage loan when the house owner dies before the loan has been paid off. In fact, you don’t need to wait until the bank tells you to buy a life insurance. You should have  a consideration of mortgage protection (actually protection of your family assets and living style and quality) and have an action of planning a life insurance before buying a house.

You might have some other loans, such as car loan, student loan, investment loan, credit card loan, and so on. So you should have a sufficient coverage amount to protect your loans when you plan a life insurance.

3\\How do you plan to support your kids’ education if you die early?

I remember a story that said one Korean student graduated from Harvard University. At the graduation ceremony, he wept to thank his father who died of an accident when he was only 6 years old. His teachers and friends only knew his mother raised him and supported him to go to the Famous university in United States. So everyone was very surprised and curious why he thanked his father. He finally revealed the answer: his father bought a life policy for himself very early. Although his father died in a tragic accident, his insurance brought a large amount of money to let him live with his mother worry-free and enough to support his education.

For parents, children usually are put on the most important position. I know children are the most loved  ones in a family. However, I have to say, please don’t buy a lot of useless things to them as their requirement. If you really love them, you should buy yourself a large life insurance to protect them in case any bad things happen to you, just like the Korean student’s father.

You also should buy yourself a life insurance to protect some disable family members, such as elder parents or disable kids or spouse if you die early.

4\\ Have you thought of the final expenses?

Whenever you pass away, early death or end of life, a large amount of fees have to be paid, such as funeral, cemetery, taxes on growth of assets and related fees on assets (probate, executive fee, lawyer fee).

So we are planning a life insurance, we have to think about these aspects.

5\\Other reasons you might not have a sufficient thinking.

You know, death benefit is a tax-free money. So you can utilize it to avoid taxes on growth of assets. Thus, you would leave full of your fortune to your family by the tool called life insurance.

Mostly, life insurance would bring your family more financial security and peace of mind. We know, money couldn’t replace a person, but more than anything, life insurance can provide a protection of the uncertainties when a family lose a life. No doubt, life insurance will bring worry-free to your family and then your family members can plan their life without any stresses. That would lead to their living go back to right track quickly.

When you feel worry-free, you will live happy.

This article is intended only for the purpose of informational reference which is completely personal opinions of the author himself, neither constitutes specific sales proposals or insurance advice, nor expressly proposes or implies the purchase, or endorsement of any specific any financial products. Prior to any financial planning, please consult a professional and qualified Financial Advisor, or contact the author himself for a personal discussion. All contents are intended only for the reading by residents and citizens of Ontario Canada. My cell: 4163004768.