Life Insurance in Nunavut
The federal territory of Nunavut is a rather unique place for several reasons. One interesting thing about Nunavut is that it’s the only region in Canada that is not connected by highway to the rest of the country. Also, Nunavut isn’t just the least populated region in Canada; it’s one of the most sparsely settled in the world. The four official languages of the territory are Inuktitut, Inuinnaqtun, English and French. The majority of Nunavut’s 32,000 or so residents are Inuit, and the population has been expanding at a higher rate than the rest of Canada due to above average birth rates.
Residents of Nunavut know that purchasing life insurance is an important part of a family’s financial security. There are many reasons why people buy life insurance. For example, one reason to buy life insurance is to make sure that the policyholder’s funeral expenses and medical bills will be paid for. Another commonly cited reason to buy life insurance is to make sure that the children will have enough money to go college despite the loss of the policyholder’s income. Some people buy life insurance after they have purchased a home; if they’re no longer around to pay the monthly mortgage bills, the life insurance death benefits will cover the payments instead so the family will not lose the property.
There are two different categories of life insurance: term life insurance and permanent life insurance. Term life insurance is designed to provide coverage only for a specific period of time. The upside to term life insurance is that it tends to be cheaper and allow people more flexibility in planning their life insurance. For example, if a family has young children, they will need a larger amount of coverage. However, when those children have grown up and moved out, there will no longer be a need for the same amount of coverage. By purchasing term life insurance, once the term is up and the children are out on their own, the policyholder can either choose to forgo buying another policy or purchase another policy for a lower amount of coverage.
In contrast to term life insurance, permanent life insurance provides coverage for a lifetime. There are three different kinds of permanent life insurance: whole life insurance, universal life insurance and variable universal life insurance. Permanent life insurance does more than just provide coverage; it allows people to build up cash value and earn additional income through stock market investments or interest rates. Some of these policies may allow you to withdraw or borrow money from your policy as well.
There are two different ways to calculate how much coverage you should buy. One method is the lump sum method: You add up all the debts, expenses and taxes that your family would be faced with after your death and estimate how much money would be required to pay for all of it. The other method is the income replacement method: The amount of coverage required is equal to your estimated income for a certain number of years.