Recession, crash, global pandemic… In his nearly 30-year career in insurance, Louis Lavoie has experienced crises.
But if all of them ended up being reabsorbed, in his opinion, certain things remain, such as:
the impossibility of predicting the future;
the need to protect those we love after death.
And the sooner you take action, the better. Here’s why.
Imagine a couple with three children, where each parent earns $50,000 a year—misfortune: one of the two dies.
“The drop in revenue is drastic. Except that life goes on: you have to pay for electricity bills, school, clothes, food… When a parent dies, the costs don’t halve”, underlines the director, sales of insurance products. at Sun Life.
In this kind of situation, good life insurance becomes very useful. It guarantees the financial security of those who survive you and depend on you – spouse, child or business partner.
How does life insurance help your loved ones? Tax-free death benefits compensate for lost income and repay any unpaid debt.
Are you young and taking out insurance?
To enjoy this peace of mind, you must first prove to your insurer that you are “insurable”. You must answer his questions about your health so that he can properly assess your request. Without this, you run the risk that your request will be refused or accepted for an additional premium*.
(*Premiums are the monthly or annual fees you pay for your insurance.)
By taking out life insurance at a young age, you have a better chance of getting guaranteed insurability.
Your premium is often established according to your age, lifestyle, medical history, and state of health. If you are in your 20s and good health, you are more likely to be deemed low risk. You will therefore pay a lower premium.
“It is never too early to insure yourself,” insists Mr Lavoie. It will generally be easier to get a standard bounty when you are young and healthy. »
4 common types of life insurance
It is also possible for parents to take out protection for their newborns. “This type of term insurance — like other term life insurance — can be converted into permanent insurance in adulthood. And in general, no need to provide any other medical information at this time. »
Term or permanent life insurance? What you need to know to choose well
Is term life insurance right for you?
Is permanent life insurance right for you?
What if you insure yourself later?
The older you get, the more your situation and your needs change. At 20 years, the obligations are not the same as at 30, 40 or 50 years.
Once there, you will have a career, a house, a spouse or children. Here, it is no longer just a question of being insurable. It is also about protecting your loved ones, paying your taxes and covering your debts in the event of your death.
“Even after 50, it’s not too late to insure yourself,” says the specialist.
What life do people lead at this age? Some run a business. Others are homeowners. Still, others have built up personal wealth and an investment portfolio.
Then, what happens after death? Some things become taxable at this time, such as capital gains on real estate. Thus, your relatives or your heirs can end up with large tax bills on their hands.
