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Why parents need term life insurance coverage
No parent wants to consider a future where they’re not around to support their children, but life is full of the unexpected. Term life insurance coverage helps parents provide their children and surviving loved ones with financial protection in the event they pass away during their crucial parenting years.
As a parent, you carry a unique set of financial risks and responsibilities. You’re not only caring for your children, but you may have a spouse, aging parents, or other family members who depend on you in various ways. When you purchase term life insurance, you can provide your beneficiaries with a lump-sum payment if the worst were to happen. This payment is tax-free and can be used to cover any expenses your family might incur in the years following the passing of an earning parent.
Choosing the right policy for your family
There are a lot of factors that go into choosing the right term life insurance for families. But it’s important to customize your term life insurance policy to fit your family’s specific budget and financial needs.
Providers like Blue Cross Life offer insurance options for families of all shapes and sizes. When evaluating your needs for family life insurance in Canada, you can choose from:
- Term lengths of 10, 15, 20, 25, or 30 years.
- Coverage amounts from $100,000 to $5 million.
Parents also benefit from additional perks when purchasing Blue Cross Life’s Term Life Insurance, including:
- $10,000 in free life insurance for each child and any future children.
- 10% off rates in your first year when purchasing as a couple.
- Free cancellation with no penalties or fees.
- 30-day grace period for missed payments.
Every term life insurance policy is different. Be sure to take the time to review your policy to make sure it’s the right fit for your family.
How much term life insurance coverage do parents need?
How much term life insurance coverage you need as a parent comes down to your family’s unique situation. The goal of term life insurance is to alleviate any financial burden in the event you’re no longer around—and this should be reflected in your coverage amount. While every family is different, experts typically recommend approximately 7-10 times your annual salary as a good starting point.
Even dual-income families can face the potential of financial hardship if one earning parent were to suddenly pass away. To ensure your family has adequate protection, here are some things to consider when calculating the life insurance coverage and term length you need as a parent:
- Age of your children: The number of years your children will remain financially dependent.
- Daily living expenses: Day-to-day costs to help maintain your family’s lifestyle.
- Income: Coverage for any loss of income.
- Debt: Any existing debt, such as mortgages or loans, you’d like to cover.
- Other future expenses: Major expenses you would like to set aside for your children or loved ones, such as university tuition or down payment on a home.
With Blue Cross Life Term Life Insurance, you have the flexibility to choose coverage amounts from $100,000 to $5 million—and an additional $10,000 of free life insurance for each of your children.
How term life insurance supports your family financially
Term life insurance can support your family financially by providing a financial safety net during the years your financial responsibilities are highest. For most parents, these are the years when their children are financially dependent.
In the event a parent who is a policyholder passes away, term life insurance can provide your family with a 100% tax-free, lump-sum payment. This payment can be used to cover things like:
- Cost of childcare
- Living expenses
- Debt repayments and mortgages
- Funeral costs
- Lost income
How term life insurance can adapt as your family grows
Life (and your family) changes, and so should your term life insurance policy. As your family grows and your life evolves, you can—and should—make changes to your coverage to reflect your current needs.
For example, if you welcome a new addition, you may want to increase your coverage to safeguard your growing family. Meanwhile, as your children grow up and become financially independent, you may choose to reduce your coverage to reflect your lowered financial responsibilities. You may also change your beneficiaries over time, depending on who you’d like to receive the payout.
Blue Cross Life’s Term Life Insurance offers parents the flexibility to make changes to their policies, including free cancellations without any fees or penalties, and the option to convert to a longer-term policy in the first five years.