Life Insurance


Life insurance is a way to protect your survivors and dependents against financial hardship. A life insurance contract or policy is a legal agreement between you and an insurance company that guarantees payment of cash, the face value of the policy, upon death.

Things To Consider

  • If you are in a personal partnership (usually marriage), how much do you contribute to the family budget? If you were to die prematurely, how would your survivor(s) get by, especially dependent children?
  • Does anyone else depend on you financially, such as a parent, grandparent, brother or sister?
  • If you are a single parent, what level of support payments are you making or getting? How would these be kept up in the event of the contributor's death?
  • If you have a mortgage on your home, do you want it paid off in the event of death?
  • If you have children, do you want to put aside money to complete their education in the event of your death?
  • Are there any other family members or organizations to whom you would like to leave money?
  • Could life insurance play a role in business or farm succession plans?
  • Could the life insurance play a role in paying the taxes incurred when capital property is transferred from one generation to the next?

Permanent and Term Insurance

There is a seemingly endless array of policy types and names, they all boil down to two basic forms of life insurance: permanent and term.

As a rule, permanent needs should be covered with permanent insurance, temporary needs with term insurance. Often, a combination of policy types does the best job for you.

So, what is a temporary need? A mortgage; high needs for continuing income when your children are young; some business obligations; and so on.

Permanent needs? Funeral expenses; supplementing a survivor's income; covering capital gains taxes at death, especially if family property is to be passed on to the next generation; children who remain dependent for their lifetimes, often due to a disability.