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Types of Life Insurance

Basically, there are three types of life insurance contracts that you need to know about:
Term, Permanent (often referrred to as “whole life” insurance), and Universal Life insurance.

types_of_life_insurance

Term life insurance

Term life insurance is the most traditional and best-known form of personal coverage, paying out to the policyholder’s dependents in the case of death. The main advantage of this insurance is that it is lower priced initially than other types of insurance, but it offers few other benefits.

This type of coverage typically operates for a fixed term of 10 to 30 years, depending upon the policy, and pays out the benefit amount if the policyholder dies.

Permanent (or “Whole Life”) Life Insurance

Permanent life insurance offers coverage for a lifetime, with a guaranteed payout upon death.

You choose the death benefit that will be paid upon death. You make payments in to the policy fund. Any amount you pay into the fund in excess of the cost of insurance (the premium) provided by the life insurance contract is invested and builds a cash sum over time. This cash investment enables the value of the death benefit to increase, or allows loans to be taken against the policy, with many people seeing this as a viable income stream for their retirement plans.

Universal Life Insurance

Universal life insurance offers an extremely flexible middle way, combining life cover with the chance to build up an investment income, at a lower cost than fixed permanent life cover.

This type of cover can be very flexible and allows payments to be varied, depending upon the current financial circumstances of the policyholder. Money paid over and above the normal premium can be used to either increase the cash value or increase the death benefit.

Summary

The three types of policies: TERM, UNIVERSAL, and PERMANENT (or “Whole Life”) insurance offer different benefits depending upon the needs of the policyholder.

The most affordable option, a simple Term policy, offers temporary coverage, but no other investment potential, and is usually a prerequisite when taking out a mortgage or a large loan.

Permanent (or “Whole Life”) and Universal Life insurance contracts are more flexible, offering tax-free investment potential alongside the lifetime coverage, allowing money to be invested into the death benefits or the investment account.

It is always important to seek independent financial advice before committing to any major financial decision and to be aware of all the long term investment opportunities available.

One of the easiest ways for you to make an informed decision before you buy life insurance is to sit down with a Financial Advisor to evaluate your situation. A Financial Advisor can help you determine the type of insurance coverage that is best for your unique situation.

Question or concern about Life Insurance?

Call Firth Bateman: (604) 591-1336
Life Insurance
Delta, BC

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LONG TERM CARE INSURANCE

Long Term Care Insurance

“For a couple turning 65, there is a 70% chance that one of them will need long-term care.” – Wall Street Journal “60% of people over 75 need long term care. The average facility stay for older folks is about 3 years.” – Business Week “Over 50% of all people entering a care situation are penniless within one year.” – Harvard University

Long Term Care Insurance provides income should you end up requiring extended care. Long term care typically includes rehabilitative care, nursing care, personal and in-home health care. Long Term Care Insurance protects you in the event you have to enter a long term care facility. It can also help should you ever require at home health care assistance. The most popular type of long term care policy is one that provides income to you to provide for any type of long term care service – both in the home and in designated care facilities. Other types of policies reimburse you for eligible expenses or pay a set daily amount for expenses.

Question or concern about Long Term Care Insurance?

Call Firth Bateman: (604) 591-1336
Long Term Care Insurance
Delta, BC

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How Much Life Insurance Do I Need?

This question requires careful consideration. First, ask yourself:
“If I died tomorrow, how much money would my family, or business partner, need?”

Insurance reduces risk and provides security for you and for your family’s future. To know how much insurance you need, you’ll need to consider your lifestyle and the possible risks that could affect it. When calculating how much life insurance you need, consider the following:

  • Estate Expenses
  • Funeral Expenses
  • Mortgage
  • Loans and Debts
  • Replacing Annual Income (number of years?)
  • Children’s Education
  • Resources available at death: Savings, Stocks, Mutual Funds, Retirement Funds, Life Insurance, and Other Assets

When you think of insurance, the first that comes to mind is auto and home insurance. Replacement of these assets in the event of damage can be very costly. Most people hold auto and home insurance policies.

Life insurance is essential to many families, affording extra security if the unthinkable should happen. The loss of a breadwinner is devastating enough, without having the added stress of worrying about how to cover the bills and mortgage.

Other types of insurance are equally important. Life events such as illness, accidental injury, loss of employment income, or a death in the family can affect family security. Yet these potential risks to your lifestyle can be reduced by the right insurance planning.

Changes in lifestyle also determine the types and amount of insurance you need. The amount of life insurance – and the characteristics of life insurance contracts – that you have will likely change throughout your life, depending on your life circumstances. Some of these changes might be getting married, starting a family, changing jobs or preparing for unexpected events.

Should you have Term, Universal Life or Whole Life Insurance? More information on the three types of insurance . . .

To meet modern trends, life insurance contracts can also act as investment vehicles, building up a sum of extra equity over the lifetime of the policy. This can be withdrawn or borrowed against, and usually offers a tax-free sum on retirement or death.

Deciding on an amount of life insurance you should have requires careful consideration. A Financial Advisor can help you determine just how much insurance you need, based on your age, your income, family circumstances and obligations, assets owned, and debts owed.

Question or concern about how much you insurance you need?

Call Firth Bateman: (604) 591-1336
Life Insurance Services
Delta, BC

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HOW CAN A FINANCIAL ADVISOR HELP?

A Financial Advisor can help you:

  • assess your current financial situation.
  • create a realistic plan to meet your financial goals.
  • understand how to meet your financial and retirement goals.
  • put your financial plan into action and monitor your progress.
  • update your financial plan to grow with your changing needs and goals.

If you have any of these questions or concerns, you will benefit from a consultation with a Financial Advisor:

  • Confusion about conflicting financial advice and options.
  • Paying too much income tax.
  • Not saving enough for retirement.
  • Not sure where to invest money.
  • Changes in life that affect your financial future, such as a career change, marriage, retirement, loss of a spouse, birth of a child, etc.
  • Not enough time to attend to personal financial affairs.

Financial Advisors are licensed professionals with a broad background in life and in finance. They can guide you through some important life decisions. They can help you manage the risk involved in making decisions that can paralyze some of us, such as:

  • What kind of retirement plan do I need?
  • Am I paying too much in taxes?
  • How can I save money for retirement – tax free?
  • How much life insurance do I need?
  • How can I make sure my estate is left to family members, and is not depleted by probate court and government taxes?
  • Can we afford college tuition for our children – and how do we save for this, knowing how much tuition costs are spiraling?

Would you benefit from having professional advice when it comes to planning your financial future? A Financial Advisor is a partner that can help you understand your options and help you build and protect your assets.

A Financial Advisor can help you evaluate different life insurance plans and help you determine which policy or product is best going to serve your own unique needs and budget.

To assess your financial position and learn about some of the ways in which we can assist you, call us to schedule an appointment. Evening hours are available, and we can meet in your home or in our office.

Questions or concerns about how a financial advisor can help?

Call Firth Bateman: (604) 591-1336
Financial & Insurance Services in Delta, BC

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Retirement & Estate Planning

Have you ever wondered whether you will be able to retire?

Do you know how long your retirement savings will last?

With the average life span increasing, many of us may look forward to 30 years of retirement or more.

“Amid growing uncertainty about their future financial security, an increasing number of people do not know when they will retire. Others have simply delayed their retirement.”

• Are you prepared for retirement?
• Will your savings and retirement income be enough?
• What forms of income will you have?
• Do you know what your income needs will be at retirement?

It’s never too early to start planning for retirement.

A Financial Advisor can show you some of long term investment strategies and vehicles to help you meet your retirement savings goals, minimize your estate tax liability, and provide security for your spouse/family.

You should have an estate plan if:
1) you are the parent of minor children.
2) you have property (real estate) or a business.
3) you are concerned about health care treatment should you become disabled or terminally ill.

Estate planning includes more than just a simple will. Estate planning also typically minimizes potential taxes, and sets up a contingency plan to assure your preferences regarding health care treatment are followed.

Good estate planning identifies what will happen with your home, business, investments, life insurance, retirement plans, and other property when you become disabled or die.

A Financial Advisor will help you answer these questions:

  • Am I saving enough for my retirement?
  • How will inflation affect my retirement income?
  • I’m retired now, how long will my savings last?
  • How much retirement income will my RRSP provide?
  • What are the best retirement investment funds for me?
  • How much can I contribute to an RRSP?
  • What will my RRSP be worth at retirement?
  • What happens if I withdraw funds early from my RRSP?
  • I’m self-employed, how much can I contribute to a retirement plan?
  • How long will it take to double my money?
  • How do I compare any taxable vs non-taxable savings?
  • How should I allocate my assets?
  • How can I protect my assets from probate and estate taxes?
  • What is my potential estate tax liability?

Question or concern about Retirement & Estate Planning?

Call Firth Bateman: (604) 591-1336
Financial Services in Delta, BC

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