Being a responsible provider means being prepared. Life insurance is designed to give you that peace of mind. It ensures that even without your financial support, the ones you love would not face a drastic upset to their accustomed way of living. The loss of a household’s primary income can mean forfeiting on a mortgage or depleting educational savings. Thankfully coverage today is incredibly affordable and, thanks to the internet, getting coverage is easier than ever.
Why Life Insurance?
Relieving your mind of the stress associated with financial uncertainty starts with action. The internet is a great resource to learn about the many options available to you. Then, speaking with an insurance advisor can help you learn which of these policies best applies to your own situation. Far from being just a sales agent, an insurance professional’s main objective is to match your own personal needs and situation with one of the many insurance policies that are available today. Whatever your ultimate intention with life insurance, be it estate planning or to provide coverage while you pay off your mortgage, one thing you will need to do is name your beneficiaries.
The person receiving the death benefits from a life insurance policy is known as the beneficiary. When you are named in a policy the money you receive will be paid out tax free.
The basic types of beneficiaries:
- Primary – This type of beneficiary is the considered to be the first choice to receive the death benefit. Some policies allow you to select two or more people as your primary beneficiary.
- Preferred – If you choose a parent, child, grand-child or spouse as your beneficiary then they are considered by the life insurance company to be a preferred beneficiary. Sometimes the insured may have creditors to which they have significant debt but a preferred beneficiary is protected against these creditors.
- Contingent – Sometimes the primary beneficiary dies before they can receive the benefit. If this happens the person that will receive the death benefit is known as the contingent beneficiary.
Things to Consider
The most common person to receive death benefits is the insured person’s spouse. The second most popular choice is children or grandchildren. You must be over the age of 21 in most cases to obtain that money without a trustee. This can change with different policies.
Sometimes parents are chosen as beneficiaries because many single parents have no children and want to protect their parents against funeral expenses. It will also allow your children to be taken care of if both you and your spouse are to die.
Many people choose to give their death benefits to friends – often this is because they do not have immediate family. Although less popular, donating your life insurance to a charity is also another viable option. Many people with no immediate family feel that they should share a portion of their policy with a charity that may have helped them during their life.
The Next Step
If you’ve read this far, chances are it is because you realize you can benefit from the peace of mind that only life insurance can provide for you. With so many options, we can help you make the right decision by taking care of the more confusing aspects, like finding an appropriate broker and comparison shopping. With LifeCover.ca, you concentrate on protecting your family because with something as important as life insurance, you need to know you’re making the right decision.