It’s Too Expensive
I get it. Especially if you are just starting off. There’s daycare, mortgage payments, car payments, maybe even student loan payments. But if you think money is tight now, how tight do you think it will be with the loss of a partner’s income? The reality is, unless you see the value of life insurance, there will always be other places to put money. In a recent poll, 71% of Canadians felt they need insurance, yet 60% have some type of coverage.
Insurance, That’s for Old People, Right?
I hear that one a lot. Ironically, it’s only when most people need the insurance that they see the value. True: it is, statistically, more likely that you will die later in life. However, remember two things: one, if you are young and healthy, it’s more likely you will get approved for life insurance, and two, it’s much less expensive today, versus when you are older. If you can even get approved when you are older. Also, think how devastating it would be if you were younger, with a large mortgage, perhaps children, debt, and you lost your spouse. I argue anyone with debt, and/or children, should look at life insurance.
I’m Young, Strong and Healthy
Congratulations. But you are neither immortal nor indestructible. And remember, as previously stated, insurance is much less expensive to purchase when you are young and healthy.
I Have Life Insurance Through Work
Fantastic. You have some coverage and that is great. How long have they guaranteed your employment there? What? There is no guarantee you will retire there with a gold watch? All the more reason to have you own coverage. If you leave your company, your work place benefits end. My experience is that most workplace insurance plans only cover a small amount. A proper needs analysis should be completed to determine how much insurance you actually need. A qualified advisor can help with this, but you should be involved in the process too. Ideally, it’s interactive.
I Don’t Have Kids, or I’m Single
Yes, having children is a big reason why people buy life insurance. But it’s not the only reason. Is there anyone who would suffer if you died now? Your parents? A sibling? Someone else you care about? Also, you may be single, or have no kids today, but what about in the future, when you may not be able to afford the coverage? Just a though.
Life Insurance is on My List to Buy…One Day
Got it. Money may be right. But just understand that one day can eventually turn into “if only.” Sadly, over the past 25 years I have had clients come to me afterward and say “I wish I took your advice and bought critical illness insurance and now it’s too late.” I have also had people ask me why their spouse never bought insurance. That’s a tough one.
David Reeve is President of Davlyn Financial, a local financial planning firm. For more information contact him at firstname.lastname@example.org