Four reasons to get life insurance at any age

You work hard to take care of your family. Life insurance lets you keep doing just that, even if you pass away. A good time to start looking into life insurance is when you’re starting a family, buying a home or taking on another sizable debt that you want your partner to be able to afford no matter what. But any age is a good time to start thinking about the future.

Both term and permanent life insurance can help provide protection and relief to your loved ones when they’re missing you the most. Having life insurance coverage means your spouse, child or other beneficiaries will have financial resources they can use towards the cost of childcare, bills or funeral costs.

Universal life and whole life insurance can also be a tax-smart way to save and invest for your own future. As needed throughout your lifetime, you can use the cash/accumulation value you’ve built up within your policy as a financial safety net in case you ever need the funds or to supplement your income in retirement.

You can also use it to cross things off your bucket list. Whether you want to go on a luxurious trip to celebrate your retirement or start the business you’ve always dreamed of owning, the cash value from your policy could help.

Let’s face it—getting a quality education isn’t cheap. Another way you can make the most of the cash value in a universal life insurance policy is to help pay for your child’s education. Here’s a quick example of how it might work:

You purchase a policy on the life of your child and contribute to it until they turn 18 (or 19 in some provinces). Then you can transfer policy ownership to your child.

With the right planning and market conditions, there could be enough invested in your policy to continue paying the premiums so that your child doesn’t have to worry about paying them. Beyond that, your child can even use the money in the investment portion of the policy to help pay for his or her educational costs. One thing to keep in mind is that growth isn’t necessarily guaranteed since it’s based on the performance of your particular investments.

If you’re looking for a tax-smart way to leave your assets to your family, permanent life insurance might be the way to go. Though term life insurance is the most popular choice for Canadians, permanent life insurance has its own unique perks. Some plans even guarantee your acceptance.

If you research the premiums on a whole life or universal life insurance policy, you might notice they’re a little higher than if you opted for term life insurance. That’s partially because some of your hard-earned money goes into an account where it has the opportunity to grow without being taxed. That growth is only taxed if you access it while you’re still alive. It remains tax-free if it’s paid out as a death benefit to your loved ones.

Permanent coverage can help you plan ahead for future costs by:

• Providing your family members with the money they’ll need to pay the taxes on whatever assets you want to leave them (like the family cottage).
• Preventing your family from having to dip into investments or sell off assets (like your home, business or stocks) if they can’t afford to pay the taxes on them.