No matter what stage in life you are at, every person needs to ask themselves: If I die, would my loved ones have enough money to live on? If you answer no, you may want to think about life insurance. Life insurance helps your loved ones carry on financially after your death.
How does it work? Life insurance is a legal contract. It sets out:
- How much money the insurance company will pay to your loved ones if you die
- How much you will pay each month to get the insurance. This is called your premium. The more insurance money your loved ones get, the higher your premium will be
- How long the insurance will cover you. Sometimes it's for life. Sometimes it's only for 10 years, or to a certain age. The more years you want your insurance to cover you, the higher your premiums will be.
Who needs life insurance?
Many people need life insurance. The only people who may not need it are those who have no debts and no one to depend on them for money. For most of us, that's not the case.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.