THUNDER BAY, ON ---- May 11, 2010 --- How would your family fare without you?
Contingency planning for family
When was the last time you took a few moments to think about how your family’s lifestyle would be affected by losing you? Not only does your family depend on you for love and emotional support, but the fact of the matter is, they also rely on your continued earnings to provide for their daily living needs.
This is why it’s critical you maintain sufficient life insurance coverage.
In the event of your death, life insurance proceeds can be used to eliminate debt, provide a home free and clear of mortgage payments, guarantee funds for a child’s education and to replace the income you generate today that maintains your family’s lifestyle.
How much is enough?
A common rule of thumb suggests you should maintain life insurance coverage equal to ten times your income. However the danger of a ‘rule of thumb’ is that it does not account for an individual’s age, stage of life, or personal and family circumstances. Instead of relying on a ‘rule of thumb’ that may not apply to you, you’d be well advised to complete a thorough needs analysis with the assistance of a financial planner. An estate needs analysis will determine precisely how much money would be needed to produce a steady income for your family and how you’d choose to address mortgage and other debt obligations like post-secondary schooling for your kids, and other goals in the event of your death.
If you’re a stay-at-home parent, don’t assume your lack of income means you have no need for life insurance – replacing your family role with professional child care and domestic help will be costly as your spouse continues in their career.
Going beyond life insurance
At the same time, don’t overlook the financial toll a disability would take on your family. U.S. figures show 48 per cent of all mortgage foreclosures are caused by a disability induced loss of earning power.*
Appropriately-designed disability insurance can fill the void in the event you lose your ability to work or should you have no choice but to accept a lower-paying job.
Critical illness insurance usually pays a lump sum to you if you are diagnosed as having a life altering medical condition as specified in the particular policy – such as a heart attack or stroke, or if you are diagnosed with a life threatening disease like cancer.
Ensure your Will is updated regularly, making sure you specify whom you’d like to take care of your children in the event you and your spouse should die simultaneously. This should be discussed with your designated guardian(s) before your choice is formalized in your Will and provisions should be made to ensure funding is available to allow your guardian to carry out his/her responsibilities.
Also, make sure you appoint an executor. This is the person who will act on your behalf to settle your personal affairs, including the financial aspects of your estate.
Talk with us today to ensure you’ve done all you can to look after the needs of your family in the event of an unforeseen circumstance.
*U.S. Housing and Home Finance Agency.
Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant.
Insurance products and services distributed through I.G. Insurance Services Inc. Insurance license sponsored by The Great-West Life Assurance Company.
™Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations.