Do you need life insurance?

 

If you have family or financial obligations, such as a spouse, dependent children, a mortgage, etc., unless you are financially independent, you need life insurance.

Each year, many Canadian Forces members pass away. The great majority of them are under 40, married or in a common-law relationship and have children.

Are these CF members' families sufficiently protected financially? Maybe... maybe not. Let us first point out that the Minister of National Defence is the minister responsible for administering the Canadian Forces Superannuation Act (CFSA). Under this law, upon the death of a Regular Forces member, a lump sum death benefit equivalent to two times his or her salary is payable. Under certain conditions, a monthly benefit may also be paid to the surviving spouse or children.

Although these coverages offer some protection to those entitled to receive them, you must ask yourself whether you need additional protection. Here are a few questions to guide you in this decision:

• If you die prematurely, will your spouse or children be able to maintain the same living standards, or at the very least, survive financially?
• Aside from your spouse or children, do others such as your parents, grandparents, brothers or sisters depend on you financially?
• If you are a single parent, what financial support do you give or receive? How will you ensure the continuity of this support?
• If you have a mortgage or personal debt, do you want them to be settled upon your death?
• If you have children, do you want a sum of money to be set aside for their education?
• If you have very young children, will your spouse be able to stay home and care for them for a few years after your death?

In order to help you determine your family's financial needs in the event of your death, you should consult a life insurance representative who will do a life insurance needs analysis according to your financial goals and family obligations. Once you know the amount of insurance needed, you and your representative can determine the best type of coverage for you.

Insurance has long been considered the cornerstone of good financial planning. Without it, how can you protect your assets and those close to you? Even so, many are still under-insured.

Unless you have enough money set aside to replace the missing income upon your death, life insurance remains the only way to guarantee adequate protection for your family so that they can continue to live reasonably and fulfill their goals.

This article is for general information purposes only and is the opinion of the writer.

Written by: Renée Trépanier, Education and Communications Manager
SISIP Financial Services, Ottawa