Rob Carrick
Feb. 16, 2022
iStock-1287119388.jpg
A lot of personal finance is about trying to exert some control over the uncertainties of life. But the uncertainty of death may be easier to address.
What would happen to your family if you died suddenly? If you have an up to date will and term life insurance, you can be confident you’ve done your best to provide an answer.
The Carrick on Money Back to Basics series has so far covered personal finance basics that are really about exerting control over your spending, saving and investing. This stuff is hard – it requires ongoing focus and sacrifice.
Looking after your family in case you die is a more manageable task because it has only two parts, term life insurance and a will.
Term life insurance is a way of putting a block of money into your family’s hands if you die. In deciding how much term life coverage to buy, consider how much it would take to pay off your debts, including mortgage, the costs of raising and educating your children, other family expenses and funeral costs. Pick an amount of coverage for your term policy, choose between term options like 10 years, 20 years or longer and then try some online quotes to compare the monthly premiums you’d pay. Just google “term life quotes Canada” and dig in.
Buying term is a pure insurance decision you make to protect your loved ones. When the policy expires, you can either renew it if required or let it lapse with no cash value. You may find you no longer need term coverage when your kids are grown and financially self-sufficient.
Like many people, my wife and I had a will drafted when our kids were babies. On my own personal finance to-do list is to get that will updated. Our twenty-something boys will not need to go live with this or that family member if we both died. We used a lawyer for our original will, and will consul one again for the update.
The cost could start at $500 to $700 or more, which I consider money well spent for the legal consultation that precedes drafting of the will. But there are a growing number of much cheaper, even free, will options available online. For simple situations and for those in a hurry, these kits are worth checking out.
One final thing you can do for your family in case you die suddenly: tell them – no, show them – where your will and insurance details are kept. Let everyone share the peace of mind of knowing these matters are looked after.
This Globe and Mail article was legally licensed by AdvisorStream.
