How am I ever to know what type of life insurance is best for me when I don't know how they all work? Let's tackle this one for you and provide a list.
As times change so do our personal situations. This is the main reason insurance companies have created a variety of programs. They are constantly evolving as well. I know in my situation I am going to insurance company information sessions on a monthly basis to learn about new programs or how existing programs are changing. There is no way I would expect that the average person would have access to this information or even have the time to learn. I will give it my best to provide a summary for you, as long as you are aware - I can't cover everything.
What is the best type of life insurance?
Answer: One that is in force and pays out when you die! I am not trying to over simplify this or sound condescending or cheeky. But, the real truth of the matter is, as long as you have a policy in place which pays your beneficiary when you die, that is good in my books. The problem is we never really know when our time will come, so we have to plan for the longest time period we are comfortable with and understand what happens during our lifetime and the stage we are at. Then we must make sure it fits in your budget.
Take a tour of the Manulife Insurance Needs Analysis to help determine how much insurance you actually need. If you need some help, just reach out to us and we would be happy to walk you through and complete your insurance needs analysis.
I have seen so many families with no insurance because the previous insurance agent put them into a program that wasn't suitable for the long term. Some programs are really great, but if you happen to change your job, become unemployed, have some children, or go back to school, the insurance you put in place needs to be somewhat flexible to keep in force... even if it does take you off the direction of the original plan.
A flexible, real life insurance situation example.
After reviewing a husband and wife's situation we decided to put a hybrid life insurance plan in place. Initially, they were funding the policy to build up a cash value for their future and also, so that they could stop paying for the insurance before they retired. About six years later, the client's wife decided it was in her best interest, for long term income potential, to go back to school. In fact, they actually moved to another province with plans of returning. During their time away, we had them stop paying for the insurance and used the cash value to pay for the premiums. Three years later they were back in Alberta, making more money. When they got back, we started refunding the plan. At no time did they go without life insurance or have to re-qualify for mortgage insurance while they changed homes.
There are really 5 main types of life insurance available:
- Term life insurance
- Whole life insurance
- Universal life insurance
- Mortgage/Loan life insurance
- Hybrid life insurance
There are even programs available for those who have medical conditions, or have previously been declined life insurance, or perhaps those using Marijuana. Of course, all of the different types will have different costs and various insurance companies will have different prices as well. Make sure you are working with a licensed insurance broker who has all the options available with many insurance companies to choose from. Since everyone's situation is different, the choices that you will have will also be different. What works well for one family may not work well for another.
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