Ask your advisor to do a capital needs analysis You may want to replace the income of the life insured—either you or your spouse. It is easy to calculate the capital needed over any short or long period of time in any situation if the life insured were to die. There are many professional calculators that allow advisors to prepare accurate life insurance assessments.
It may be time to review your life insurance at these life junctures:
When you leave your parents home and begin a new life. After you have finished your career training and begin a new job, you will want to buy life insurance, as you start the foundation of your goal-setting strategy to gain financial independence. The life insurance can pay off any OSAP or car loans so that the family has no financial burden should you predecease them.
If you get married, responsibilities change. If you have recently married or are engaged, your finances take on a new scope of responsibility for spouses planning to jointly to protect one another’s financial security. Reviewing your life insurance needs together to protect your income if one of you die or become disabled is the foundation of developing a sound financial strategy when you are young and newly married.
If either of you had a will it may be revoked upon marriage unless it specifically states it was created in contemplation of marriage. When planning your life insurance together consider how to carefully set up your beneficiaries. Often it is best to do so outside of a will.
If you work at a trade or a small business that does not provide Disability Insurance. This insurance is also called Income Replacement Insurance because it provides a pay-cheque if you become disabled. Your children and spouse are dependent upon your income. What if you became disabled – will that source of income dry up or become minimal?
When you have children Life insurance is purchased to provide tax-free capital in case one of the parents should die. A young mother would not be forced to go to work, reduce her lifestyle, or leave her children to be cared for by others.
When your children are going to college When children go to college, many of us tap into our savings to help meet their tuition and housing expenses. We may purchase a child’s first car, or pay him/her an income for one or more years. If you die without providing continuing support, your young adult child may need to quit seeking a higher education due to a shortage of funds.
If you have a change of executor, lawyer, accountant, or guardian. If one of these key people die, or become incapacitated, or is replaced regarding your estate plan, it is wise to review that aspect of your plan which may include an entire rewriting of your will as you appoint new people.
If you want to establish planned giving. If you desire to leave money for example, to a charity, church or religious organization, an art gallery, or a school you will need to do some estate planning. Consider using advanced life insurance planning. Life insurance can assign a beneficiary, allowing the monies to go directly to the charity or foundation. Consider that your will may need to be changed if you are using life insurance to circumvent your will.
If you have grandchildren. You may want to ensure that they are provided for, perhaps through life insurance planning.
If you have experienced a change in your level of wealth. If you inherit money, or inherit Life Insurance proceeds you may want to talk to your advisor about other types of Life Insurance used in estate planning, Disability Insurance and Long-term Care Insurance to see if financial risks can be insured to protect and/or enhance your wealth.
- If your assets decline, consider altering your bequests and newly establish this in your will.
If special care is needed for a loved one. When a spouse, parent, or child has become disabled and/or needs future care consider:
- Long-term Care costs are very high if you want a private room, or special personal attention (such as defining when you want to take a nap or go to the washroom or bath, versus a strict assembly line schedule), for yourself, parent, or another.
If you anticipate requiring costly long-term health care, you may want to alter the specific bequests in your will to reflect this new reality.
When you need to replace or change a beneficiary. If you appoint a new or revoke a previous beneficiary, review your beneficiary designations with your life insurance representative and your beneficiaries.
If you have sold or will sell a business. If your assets become more liquid upon the sale of a business, you may want to pass that benefit along to beneficiaries or charities; or enhance your retirement.
- If a partner has bought or is buying your business previously bequeathed in your will, you may need to adjust your estate planning while using advanced life insurance planning for business-related solutions.
When you want to use or change a trustee, or trust institution. You want to assign others to be in charge of investments within a testamentary trust directive.
Where a change of legislation affects your plan. Changed government legislation can affect your estate planning. The validity of your will may be affected by changes such as estate taxation or probate laws.
If you will face capital gains taxation on a major asset. When you own an asset that has appreciated in value, such as a cottage or business, or equity investments, make sure the tax payable will not harm the estate. Affordable Life Insurance solutions can pay off your estate liabilities after death.