The current global economic situation has many Canadians wondering where they can reduce expenditure and future-proof their family’s financial well-being. Safeguarding your family’s future through life insurance is such an important step. We’re going to show you how to calculate how much coverage you need so you know you are paying the right amount.
Most people don’t stop to think for very long about how much coverage they need for their life insurance. You probably set it according to your mortgage level or went with a ballpark figure that seemed right to you at the time. Life insurance plans tend to fall under the “set it and forget it” list, but with so many unusual circumstances and consequences from the last few years, it is the perfect time to assess what you need coverage for and adjust your policy as needed.
How much life insurance do I need?
With economic uncertainty, you may think that cancelling your life insurance policy would be the best bet, but with a recession looming, the opposite is true. If the worst were to happen during an economic downturn, the effects on your family’s financial future could be many times worse than in a time of plenty.
While we understand that you want to limit your outgoings, finding a life insurance policy that suits your needs and budget will provide the peace of mind you need for the next few years and beyond.
How to calculate your life insurance coverage needs
The first step is to cover the usual day-to-day expenditure for your family. What amount would let your family continue to enjoy the lifestyle they currently lead without putting additional financial pressures on them?
Next, you have to consider your one-off expenses. If you were to pass away, what costs would be incurred? Do you want your funeral costs covered? Do you have an outstanding mortgage (if you are hoping to pay it off as a lump sum payment in this way, you can deduct it from the day-to-day expenditure section)? What would you like to leave your family as a gift?
At this stage, you can deduct any assets you hold, whether in cash form, real estate, employer-funded insurance coverage etc.
The remaining figure is the amount of life insurance coverage you should have in place to take care of your loved ones after you’re gone.
We have a free worksheet with all these calculations broken down into easy, manageable steps. You can download it here.
Can I cancel my life insurance policy?
You can, but we wouldn’t recommend it unless you have a new policy in place. If you cancel a life insurance policy, you won’t get your premiums back and your loved ones will not be able to claim if they need to.
What if I can’t afford the level of coverage I need right now?
Life insurance is more flexible than you think! There are so many different policy options and providers. We only partner with providers we trust to deliver high-quality, affordable products that we can scale to your needs.
Pop in or contact us online to discuss the right path for you. It could be that your coverage level is too high for your needs or that there is a more competitively priced option available to you. We currently offer life insurance policies from the following providers:
We’re here for you when you need us
A life insurance policy is designed to bring peace of mind but if it isn’t sufficient, or you are paying over the odds for coverage you don’t need, it isn’t serving your needs. We want to make sure you have a product that works for you, both now and in the future. Our expert team will help you consider your options and give you bespoke advice based on your circumstances. Get in touch for a free quote or contact us directly for more information.
Blue Country Insurance – all your protection under one roof… because your health and life matter.
