The Importance of Having Both Life Insurance and a Will
Life insurance and will are both essential to everyone, especially if you have assets and dependents. Preparing for the future is just as important as every other aspect of your daily life. Life insurance and a Will are important elements for future planning, and contrary to what some people believe, you rarely can have one without the other.
Understanding Life Insurance
A life insurance policy ensures your family will be paid out a lump sum upon your death. It is a contract between the insurer and yourself. You pay a monthly premium throughout the policy’s life, guaranteeing your family is paid out a death benefit if you die.
There are two types of life insurance, and understanding their differences will help you choose the best one for you.
Term Life Insurance
Term life insurance is affordable and the least complex of the two. The policy lays out a specified timeframe that your beneficiaries will be paid out if you die, and it is the ideal life insurance for most young families.
Term life insurance is more cost-friendly, but looking for permanent life insurance is not the best option.
Whole or permanent life insurance
With whole life insurance, you pay an insurance premium your whole life in return for a death benefit to your family when you die. There is no specified timeframe on the policy. This policy will last for the insured entire life span as long as premiums are paid.
Some permanent life insurance will allow you to build cash value in your policy or pay off your policy in a short period of time and have permanent coverage.
Understanding a Will
Your Will is a legal document in which you leave instructions on how you want your assets (estate) distributed once you are gone. It includes your property, money, and other investments. In your Will, you mention the people’s names (including charities) you want to leave your estate to.
Through your Will, you can also appoint the person who will wrap up your estate (executor) and appoint a guardian for your dependents.
Why is it Important to Have Both Life Insurance and Will?
Life insurance and Will have both similarities and differences that set them apart. Both play an important role in protecting your loved ones from financial burdens and offering peace of mind.
Life insurance provides enough funds for the survivors or beneficiaries of the insured. Life insurance proceedings can be used to cover the estate taxes, legal fees and probate fees.
Will would ensure that your assets and final wishes are met. Therefore, both life insurance and will are important to have.
Protecting Those You Love
One important similarity between having life insurance and a Will is that they both protect those you love.
Dying without life insurance can have devastating consequences for your loved ones, especially if they depend on you financially. It will cover everything from your funeral to their future living expenses.
If you are young and have no dependents, life insurance is not necessary. The same applies to people who have enough wealth to ensure the financial needs of their independents.
If you should die without a Will, it is legally known as dying intestate. It forces your family to decide how your estate is shared, which may not be per your wishes. Additionally, if you leave dependents behind, the court decides who will supervise their care.
Even those who are still young or do not have much money need a Will.
Preparing for the Unexpected
Unfortunately, many Canadians do not plan for their death. According to a study, 51% do not have a will, and of the 49% that do, 15% have not updated them. In another survey, it was discovered that 41% of adults in Canada do not have life insurance because they believe they do not need it or cannot afford it.
As far as insurance planning and estate planning, many Canadians changed their thoughts in 2020. More people have become aware of how unpredictable life can be amid COVID-19 and are reevaluating their insurance needs and planning their estate.
Supporting charities
In different ways, a will and life insurance allow you to support your favourite charities. This is called planned giving.
There are different ways to leave a gift to a charity with life insurance, even while you are still alive. The policy can be transferred to the charity, and you get a gift receipt, or you can get a life insurance policy in which you name the charity as the owner, and you get a tax receipt for the premiums. Finally, you can name the charity as the beneficiary of your life insurance policy and are issued a tax receipt that can be used as a death benefit.
In a Will, the charity only gets the amount you have stipulated after your death. During your lifetime, you can update your will and add or remove charities. Bequeathing an amount to a charity in your will also has tax benefits.
Naming Beneficiaries
With an insurance policy, the beneficiaries you have named receive a lump sum of money on your death. The proceeds do not go to the beneficiaries named in your Will and do not form part of your estate.
If you have not named any beneficiaries in your life insurance policy, or if they have consequently died, your life insurance policy will form part of your estate and go to the beneficiaries you have named in your will.
Final take
Suppose you have a young family, life insurance and will are both important. Your life insurance provides the financial means for their survival, and your Will enables you to allocate all your assets accordingly. It also allows you to appoint a guardian to take care of the children until they reach the legal age.
AplusWealth Inc. is here to help Canadians to find the right life insurance.
At AplusWealth Inc., we understand life insurance and will are important are we are here to help. An expert advisor is the best person to help you secure your family’s financial future and guide you to compare different individual life insurance in Canada and find the best life insurance type. A financial advisor or insurance agent will assess your financial needs, look at the existing life insurance policies you may have. They will find a way to cover all your life insurance needs within your budget.
Life insurance and the covid-19 pandemic process are done entirely online. Thanks to our expert advisers who are entirely comfortable with the online life insurance & investment platform, you can take advantage of their expert opinion about if nothing has changed by taking your age and health, liabilities, and goals into consideration. At Apluswealth, you can get a quote, compare the life insurance pricing, and find the life insurance quote you feel comfortable with. Our life insurance advisors will provide you with quotations and the most suitable policy types. Contact our expert advisers today and find out which is the best life insurance for you. If you are one of the Canadians Paying for Costly Life Insurance, contact us and find out how you can save money.
Email: Contact@apluswealth.com
Tel: 1-888-461-6120