Life Insurance FAQs

  1. Why do people get life insurance?  Answer: Life insurance is a way to make sure that your family and dependants don’t suffer financially when you die. Life insurance can be used to pay for a funeral, pay off debts (including your mortgage), pay for your children’s education and help your family maintain their standard of living when they no longer have you to support them. To learn more about what life insurance can do for you, visit Life Insurance 101: Getting Started.
  2. I don’t make a lot of money. Roughly how much does life insurance cost?      Answer: There’s really no magic number for this. A life insurance agent will make recommendations based on your individual needs by conducting a financial assessment to evaluate your current situation, your financial needs and responsibilities and your future goals. You can tell an insurance agent what you can afford and they can put forward solutions for discussion that suit your finances. There are a lot of different life insurance policies to choose from and you can usually arrange to make affordable monthly payments (premiums). You can also get quotes online from some insurers.
  3. How much life insurance do I need?      Answer: There is no one-size-fits-all answer. The amount of insurance you will need is a highly personal decision. A life insurance agent will look at your assets, debts, personal situation, financial goals and your family’s needs so they can make recommendations tailored to you. Remember, your needs might change throughout your life, so it’s a good idea to review your policy at milestone events such as getting married or having a baby.
  4. How does life insurance work exactly?           Answer: Life insurance, like all types of insurance, works by spreading the financial risk among a large group of people, who pay into a pool or fund. This minimizes the costs for those who suffer an unexpected event like death. Think of it like depositing money into a safety net that will safeguard your loved ones and your investments, and repay your debts when you no longer can.
  5. I am young and single. Do I really need life insurance now?      Answer: If you’re young and have no dependents, you may not need life insurance yet. But if you’re planning on getting married, having kids, or buying a home, you should probably start to think about it. You will want to make sure that your family is provided for, and can pay off your debts after you’re gone. Getting life insurance while you are young and healthy can result in lower premiums, as you pose a significantly lower risk.
  6. Everyone keeps telling me that I should buy life insurance while I’m younger. Why?            Answer: One big benefit is that the younger and healthier you are, the lower your premiums will probably be.