If you're wondering about whether or not to buy life insurance, ask yourself a few questions about your personal situation. Are you married or single? Do you have any children? Do you own your house? Knowing the answer to questions like these will help you figure out if you should take out a life insurance policy, and also how much life insurance coverage you should get.
When you need life insurance as a young adult
Like most young Canadians, your sudden death might not create financial hardships for others, so having life insurance coverage isn't a huge priority. However, if you have debts or are supporting a family member, a life insurance policy would ensure that your dependents are provided for should you die.
When saying "I do", you need life insurance
If you and your spouse own a house, the burden of a mortgage may be more than your spouse can afford on one income should you pass away. Other debts, including credit cards and car loans, can also add to this burden. For peace of mind, both of you can buy enough life insurance to cover your debts should anything happen.
When growing your family, you need life insurance
Life insurance needs climax when you start having children. Whether you're a dual or single-income family, the death of one spouse could have disastrous financial consequences. Both you and your spouse should carry enough life insurance to cover all expenses in the event of either's death.
When moving up the corporate ladder, review your life insurance coverage
As you develop your career, changing jobs often means changing companies. It's always important to review your life insurance coverage when you leave a company. You may not be able to keep your coverage with your former employer, so you should try to receive a comparable life insurance policy from any new company that you join.
If you're going into business for yourself, consider buying a life insurance policy. Make sure that your coverage is up-to-date, and includes all debt incurred from your business, and your personal situation.
When getting divorced, go over your life insurance needs
Divorce raises beneficiary and coverage issues. If you and your spouse do not have children, you can change your beneficiary and adjust coverage amounts to reflect your single status.
If you have kids, you'll want to make sure that they are still provided for in the event of your death. Purchasing a new life insurance policy and naming them as the beneficiaries is an option.
For more information about choosing beneficiaries, give the Kanetix article "Choosing a life insurance beneficiary: Your options explained" a read.
When retiring, review you life insurance needs with a financial advisor
Looking at your financial situation at the time of your retirement is recommended. Coverage is expensive at this stage, so you should understand what the financial impact would be if you decide to get a life insurance policy.
More about life insurance
For more information about life insurance, click on the Kanetix Life Insurance Needs Calculator to get an estimate of how much life insurance coverage you might need. You should also contact a qualified financial life insurance professional who can give you more detailed advice based on your personal situation.