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What Life Insurance is the Best Option for My Young Family?

young family insuranceMillennial Parent’s Guide to Financial Planning

As a parent, I would do anything for my children. I make sacrifices every day.

I sacrifice my eight hours of sleep each night (really though, does such a thing even exist anymore?). I sacrifice the hobbies I used to love. I sacrifice my privacy and personal space.

And it doesn’t end there.

As my circle of friends evolves to mainly include parents whose children play with my children, meals are no longer based on exotic foods my husband and I used to indulge in when we were dating (unless I want to prepare and cook two separate dishes). I no longer rely on a schedule to keep me sane during the day, because we all know there’s not much point in planning events in advance these days. And let’s face it: I gave up control over the TV remote a long time ago.

Of course, I wouldn’t have it any other way. I want nothing more than the absolute best for my family and my kids.

And while I’m perfectly comfortable making these sacrifices today, I’m not quite sure of how I go about protecting their tomorrow?

While I am young, I do think of what happens if me or my spouse are no longer here to provide and protect them? It’s morbid honestly it’s not sexy to think about these things, but an essential conversation to have with each other, especially now that we have our own kids. No matter what happens, I want to ensure my children are protected and cared for – not just physically or emotionally, but financially as well.

For years, I’ve heard mixed advice about life insurance. Some people said I didn’t really need it until I had my first child. Others recommended I am “better safe than sorry.” And yet, I have friends who complain about paying premiums and getting nothing out of it.

The truth is I don’t understand life insurance. I have had some friends pass away young and leaving their family without the money they will need to provide for their kids. I’ve come to look at life insurance as gift of love. I pay for a plan that will protect and provide for my family if I or my spouse aren’t here. The challenge is where to get it and what’s the best plan.  My father’s life insurance advisor is long gone and retired. My bank isn’t allowed under law to sell life insurance at the branch so they keep pushing mortgage insurance, which I recently learned protected the bank and not my family in the event either me or my spouse pass away before the mortgage is paid off. I looked online for life insurance but all the websites seem to be pushing cheap “term” life insurance or non medical guaranteed life insurance, which I can’t tell you what the difference is or how they will protect my family. With the expanse of types of life insurance, options and life insurance companies, how am I supposed to know what’s right for my family and what’s worth the 20 years of investment in the plan we’re going to make? How can I keep my family safe, while also preparing for their future needs?

The truth is, I don’t know what tomorrow will bring, but I do know the only sure thing is taxes and death.

Our family is my top priority. I want to ensure my children are secured if one of their parents dies unexpectedly, or faces a serious illness. I want to invest in their future today so I have peace of mind they will be looked after tomorrow – no matter what the circumstances may bring.

Do you have questions about insurance that you’d like answered in an honest and clear language we can all understand? Post your concerns to our Facebook page and we will do our best to respond in our upcoming post.

This post is part of the Diary of a Millennial Parent series. Every other week, I’ll write about my experiences as a millennial parent trying to make sense of this financial maze and what’s the best way through. Be sure to check back to the answers to my questions, which will be offered in a follow up post by Michael Lampel, President and Founder of insuranceforchildren.ca, Canada’s leading provider of financial planning for children and creator of Child Plan.

 

Sample illustration of Child Plan™ Cash and Insurance Values

Based on a Monthly Deposit of $225 per month

Age Accumulated Cash Value Life Insurance Value
20 $80,448 (Education) $770,802
35 $184,850 (House) $1,070,880
45 $325,714 (Security) $1,343,568
65 $964,321 (Retirement) $2,082,564

Sample illustration is based on a $225 monthly premium for twenty years, starting when the child is less than 1. Cash and life insurance values are based on the current dividend scale of 6.0% from a Canadian Life Insurance Company. This example is strictly for illustrative purposes only, the annual dividend scale is not guaranteed and values may differ.

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*illustrations are reflective of the annual premium amount

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