For those of you who are the sole earner and provider for your family, you have to make every dollar count. So to this end there are a number of insurance options to consider what will protect your family financially should you become unable to work for an extended period of time because of sickness, disability or worse – death. For married stay-at-home mothers, contract workers and farmers who don’t have group coverage option through work, the same issues apply.
Life insurance: Your children are dependent on your income, so you’ll need to have life insurance. The amount of insurance you need really depends on things such as to how much debt you have and your expectations for the money. A rule of thumb is 10 times your salary. Determining how long it might need to last is where a frank discussion with your insurance advisor would be very beneficial.
If you are a single parent, usually you would have your children as the beneficiaries of the policy, so that they get the proceeds in the event of your death. If your children are minors, you can name a trustee such as your children’s other parent, a grandparent or other trusted person to look after the money until your children reach a specified age. If you are receiving child or spousal support you should make arrangements for those payments to be insured as well. Otherwise, if something happens to your ex-spouse, there may not be enough money in his or her estate to cover ongoing support obligations.
Disability insurance: Disability insurance can provide you with income if you become disabled and unable to work for a period of time. To qualify for disability insurance, you will need to have steady income already established. Most workplaces offer some disability coverage but if you lose your job, you will lose that coverage, plus the potential of getting coverage through other sources.
This is where other options that combine life, disability and critical illness in one policy could be ideal for single parents, housewives, contract workers or farmers. If you work on contract with no benefits, talk to an insurance advisor about your disability insurance options.
Considering the current economic environment in Alberta, it might make sense to review your insurance to ensure you have adequate coverage at an affordable price. Bear in mind that before age 60, you are at a greater risk of suffering a disability or critical illness than of dying!
(To be continued next week)
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