FAMILY PLANNING GUIDE
LIFE INSURANCE
To determine the right amount of life Insurance, you may want to consider
Liabilities – Mortgage, Loans, Credit Cards
Income – 8 to 10 Times your salary depending on the age of your children
Funeral Expenses - $25,000 for funeral and legal expenses
Education Savings - $40,000 per young child, set aside for education
Term 10 is the most economical method of protecting your family however, if you are healthy, a non-smoker and have young children, you may want to consider the longer-term benefits of a Term 20 policy.
DISABILITY PROTECTION
If you do not have income loss protection from your employer or are self-employed, you can protect up to 75% of your income. Your options are:
0 to a 120-day waiting period
Benefit for 2 years, 5 years, or until age 65
24-hour accident and sickness benefit
Own occupation extension from 2 to 5 years for trades/professionals
The risk of a 35-year-old experiencing a 3-month disability or longer before age 65 is 33%, with an average length of 2.9 years. 1 in 8 people become disabled every year. The potential loss of income for an individual who makes $50,000 at age 35 is $1,125,000.
CRITICAL ILLNESS
This is a lump sum benefit to help you protect your savings in the case of a life-threatening illness. With the current survival rate at 78%, additional expenses and lost income may severely hinder your recovery and alter your retirement/life plans.
$25,000 to $250,000 lump sum benefit ( 2 years of expenses is a good starting point)
25 covered illnesses, including cancer, heart attack and stroke
Full return of premium option for permanent policies (tax-free)
Similar to Life Insurance, Term 10 Critical Illness is the most economical, especially if you are considered a smoker. For young families, term 10 or 20 is the most economical option. A more permanent option is Term to 75 with Return of premium option. You may want to invest as much premium into surviving as you do in your life insurance policy.
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