When we talk about age, we usually talk about a specific number. But if we talk about life’s stages, the numbers don’t really seem to matter. Instead, it becomes the “at school stage,” the “new house, young kids stage” and so on. Every stage defines a chunk of time that differs for everyone. In other words people reach stages at different ages. So when you’re analyzing your insurance needs you need to consider your current life stage and the products that can meet those needs.
TERM INSURANCE can be the perfect choice for many life stages. Commonly known as temporary insurance because you pay premiums for a limited period of time and then the insurance expires. At younger ages, term insurance is less expensive, so it is often used by people with young families. It can also be a good choice for mortgage or debt insurance. Some term insurance policies will allow you to convert your policy to permanent insurance without needing to provide more evidence of good health, this is typically allowed to age 75.
PERMANENT INSURANCE is coverage that you own until death. The two kinds available are whole life or universal life. Both are good for many life stages, but are typically for people with more disposable income. With whole life, you pay premiums for a certain period of time or for life. With some policies, you also have the ability to build up a cash value. A universal life insurance policy offers a combination of coverage and tax advantaged investing. The policy includes a variety of investment accounts and the earnings are not taxed as long as the money stays in the policy. You can purchase a universal life policy that meets your protection needs today and, as your needs change, you can add features.
LIVING BENEFITS insurance includes three types: critical illness, long-term care and disability. Critical illness pays you money if you become critically ill. This type of insurance is a valuable investment at any life stage, after all, the cost of recovering from an illness can affect everyone. Long-term care insurance provides you with the services and support you need to maintain your day-to-day activities if a chronic illness or cognitive impairment keeps you from being able to take care of yourself. While this insurance is most likely used by people in later life stages, the planning for it should begin early. Disability insurance is important for anyone who relies on working income. Supplementing your group coverage with an individually owned disability insurance policy can provide you with benefits that address your unique needs.
Whatever stage of life you’re in, you will want to ensure you’re protected. Make sure you sit down with your advisor to determine the right insurance coverage. Anything can happen. Remember to consult your advisor before taking action.
— Stuart Kirk is a wealth advisor with Precision Wealth Management. The opinions are those of the author and may not reflect those of Precision Wealth. Contact him at stuart@precisionwealth.ca
or 250-954-0247.
