When there are so many great things to look forward to in life, the last thing we want to do is think about death. But if the COVID-19 pandemic has taught us anything, it’s that life can be unpredictable. No matter what stage of life we’re in, we have to be prepared for the inevitable.
Sadly, many Canadians aren’t. Whether it’s having too little insurance and an outdated will or no life insurance or will at all, many Canadians are leaving unnecessary stress and expenses for their families to deal with after their death.
In this blog, we’re exploring why end-of-life insurance can be an easy and affordable path to offering your family more peace of mind when you’re gone.
According to a report titled the State of the Nation: Canadian Life Insurance Trends 2019, over 90% of Canadians are underinsured. Another poll done by TD Insurance and Environics Research Group said 30% of Canadians have no life insurance at all.
This means should they pass away, their dependents or next of kin may be left dealing with the grief and the bills. For instance, a 2017 Edward Jones study found that only 16% have purchased a life insurance policy to cover mortgage payments in the event of their death. Other expenses can include everything from the funeral, burial, or cremation costs and any outstanding debts and taxes to probate fees and other legal or administration fees.
What’s even more concerning is that half of Canadians (51%) say they have no last will and testament, according to an Angus Reid Institute poll. The same study found that only one-third (35%) say they have one that is up to date.
Without a will, government officials will step in to distribute property based on a cookie-cutter formula. Finalizing the estate this way can take over a year and wreak havoc on an already distraught family. If anyone was dependent on the deceased person’s salary, they might struggle to stay afloat while the estate is settled. And without adequate insurance, they might be forced to cut back on their standard of living in seemingly drastic ways.
End of life insurance is often referred to as term life insurance. This type of life insurance is usually purchased for a specific period, ranging anywhere from 10 years to 75 years of coverage.
The younger and healthier you are, the easier it will be to lock in an affordable monthly premium. And since you’re only buying the insurance for a specific period of time, the premium is usually more affordable than permanent life insurance policies.
Getting term life insurance can be a cost-effective way to cover any immediate end-of-life expenses while your estate is settled. Even if you already have a permanent or group life insurance policy, term life insurance can act as an extra buffer to pay for funeral expenses, cremation services, legal fees, and other random expenses.
If you’re looking to keep insurance costs down, you can also purchase term life insurance to pay for everything. Ideally, you should have enough to cover funeral expenses and probate fees, pay off all your debts, including your mortgage, and replace your income until retirement age if you have a partner and/or dependents. It can also cover any additional long-term financial goals such as your children’s education.
No matter what your objective is, having end-of-life insurance is a gift to your family and loved ones. It gives them the time and space to grieve, instead of stressing about how they will pay for all expenses associated with your death.
Planning for your death isn’t as tedious as it might sound. Gone are the days that require you to step into an office to buy life insurance, set up a will, or purchase cremation services. Today’s digital economy is making it easier and more affordable than ever for Canadians to be prepared for any outcome. All of these end-of-life services can now be arranged online in very little time.
So, here’s some hard truth: The only thing keeping your loved ones from being financially protected after your death is you. Taking time today to review your existing coverage and consider other end-of-life insurance products such as term insurance can help you and your family rest easy knowing all will be taken care of.
If you're considering pre-planning your end-of-life arrangements this year, Eirene can help.
Share your details with us and we can help you navigate the process when the time comes.