When baby Zoe came into their lives, Olive and Omar knew it was time to get serious about life insurance.
They had three main goals:
- They wanted to be sure that if something happened to either one of them, the other would be alright financially. For example, they wanted at least enough insurance to pay off the mortgage. This would make it easier for the other person to carry on.
- They wanted to make sure they would be able to pay for Zoe’s education if something happened to one of them. They didn’t think they’d be able to save much for that on one income.
- They wanted to start saving more for retirement. They were worried that if they spent too much on insurance, they wouldn’t have enough left over for their later years.
How could they take care of all those different goals? First, they looked at their current policies from work. They had some term life insurance, critical illness insurance, and disability insurance. Was it enough?
It was a good start, but it wouldn’t provide enough money if one of them died. The good news was that they could buy more coverage through work at a fairly low cost. This would leave them some room in their budget to begin saving for retirement. And, if something ever happened to either of them, they would have enough money to pay off their mortgage, and create a college fund for Zoe.
Lesson learned: It pays to review your insurance when life changes. If you can buy insurance through work, it may cost less. Just make sure you get the right insurance for you. Get expert help if you need it.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca
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