Over the years I have heard people say they have enough assets so don’t need to buy life insurance. When they die the family, or the estate will be expected to liquidate an asset and pay any tax or other debts.
Ask yourself one question, does it make sense to sell or borrow against an asset to satisfy a debt when there are alternatives solutions to consider?
When stripped down, a life insurance contract is really just a transfer of a liability to a financial institution. This is true of all insurance of course, the difference is all other risks, fire, car accidents, disability for example MIGHT happen. Death WILL happen; it is a certainty. Why not plan for a certainty efficiently?
How the risk is paid for is a function of analysis.
Does it make sense to sell an asset, save to accumulate the funds, or pay a premium to a financial institution to guarantee the liquidity? We run the numbers so our clients can make an informed decision versus an emotional one.
Should it be Term insurance, Universal Life or Whole life? Each has a place in the planning process.
Which insurer should it be? Policy contracts vary between insurers. That is why an analysis of the contract wording is important. We have analyzed most contracts in the Canadian marketplace and offer independent advice to help in the decision process.
Only when we have completed a thorough analysis can a client decide whether life insurance is a good deal, or not.