Ways In Which Life Insurance Can Protect Your Family

Purchasing life insurance is a smart financial investment but also an emotional decision. It is tough to think of what will happen to your family after your demise or an unexpected event. Life insurance serves as a protection for your family in the event of your untimely death. The most common types of insurance bought through life insurance associations in Canada are permanent and term life insurance.

Permanent policies usually include two components: cash value accumulation and death benefit. A permanent policy is designed to last a lifetime. The premiums, in this case, are a little higher priced compared to term policies, but in return, it provides cash value with premium dollars and coverage for life.

A term life insurance provides a sum also called the death benefit, in the event that the death of the insured individual occurs while the policy is active. As it is designed to be kept for a short time, it’s one of the most affordable life insurance policies available in Canada. However, there is no cash value offered.

 

How can life insurance protect your family?

Provides financial well-being

If you are the sole breadwinner of your family, your life insurance matters most to ensure they will remain financially protected after your death. It can also be beneficial in case you lose your job. The sum received as a death benefit can be used to pay debts like mortgages, car loans, credit card bills and so on.


Pay for child’s college

The policy’s benefit can be utilized to pay off tuition fees for your child’s college. For policies that accumulate cash value, like permanent life insurance, you will be able to access the cash value through a policy loan or withdrawal while you are still alive.


Leave a charitable legacy

Life insurance is a great tool to fulfil your philanthropic goals. Many people use the death benefit to donate money to charities of their choice. This gives you an opportunity to give back to the community and can be easily done by designating your favourite charity as your beneficiary.

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