Life can be unpredictable. Whatever your age and personal situation, make sure that you have a plan in place to provide for your survivors in the event of your death. Insurance planning is an important component in the financial planning process and TD's Insurance Centre will help you determine your needs in this important area.
- When should I buy life insurance?
The following is a list of life changing events that can indicate the need for insurance:
- The birth or adoption of children
- Changes to employment (ie. moving from a corporate position with full benefits to a self-employed status without benefits)
- The purchase of a new home or refinancing of existing home, with a higher mortgage balance to protect
- Financial obligations that you have entered into via contract (child support, educational support, spousal support)
- Marriage, Separation, Divorce
- Retirement
Life insurance requirements should be reviewed on a regular basis.
- What is term life insurance?
Term life insurance provides affordable financial protection for a specific period of time that would help your family in the event of your death. Term plans provide a death benefit only and do not include cash values. The premium for term coverage may change periodically, for example, every 10 years. Most term policies give you the option to change to a policy that provides lifetime coverage, with no medical questions asked.
- What is permanent life insurance?
Permanent life insurance is designed to provide insurance protection for the entire lifetime of the insured person. Many people appreciate this kind of security. If the insured person dies, his or her beneficiaries will receive the tax-free insurance benefit.
- What is whole life insurance?
Whole Life Insurance is designed to be kept for your entire life provided premiums are paid as specified in a policy. Premiums are fixed for the duration of the policy's existence (your lifetime or as otherwise indicated in your contract).
There is a cash value component that grows over the length of the policy and can be withdrawn if you give up (surrender) the policy, or can be borrowed if you take out a policy loan. Cash withdrawals may be subject to taxation.
- What is universal life insurance?
A universal life insurance plan combines lifetime protection with a tax-sheltered investment fund. The policy is designed to help your family cope when you're gone, but it can also build you another nest egg for your retirement. Based on individuals’ needs, universal life options can, in some cases, be complex.
- Why do I need insurance?
You need life insurance to -
- Provide an income for your family when you pass away
- Pay the outstanding balances on your mortgage and other debt
- Provide for your children's education
- Set up a fund for emergencies, such as home repairs, sudden illness, car problems, etc.
- Pay for your final expenses
- Provide a legacy for your favourite charity
- I'm single, do I really need life insurance?
While each person's financial situation is unique, you may wish to review your current financial situation to help you itemize what you owe and what you own. Our Net Worth Statement and Cash In/Outflow Worksheet will assist you with this process.
- What is disability insurance?
Disability insurance plays an integral part of your family's financial security by paying you an income if you are unable to work as a result of an accident or illness. Your employer may offer some form of disability insurance to you. In addition, government programs, such as the Canada Pension Plan and Workers Compensation may provide benefits to disabled employee under certain circumstances. However, without disability insurance, you may have to rely on your savings to fill the income gap or shortfall.
- What you should look for in a disability policy?
Having the right information is a big part
of making wise financial decisions. Scroll down to find information you can
really use!
