Life Insurance

Replacement Income

At times, we tend to think more about the negatives associated with insurance, such as losing a loved one. That’s understandable.  However, there is a positive side to insurance that we need to remember.  You’re buying more than a policy and a piece of paper.  You’re buying a replacement income.  Here’s why.  The average Canadian earns about $3,000 per month.  Over a 40-year working life with annual increases of five percent, that person would earn more than $4.3 million.

Imagine your spouse having to make mortgage payments, pay living expenses, get your children through school, and prepare for retirement when the earnings expected from your job are cut short.  Obviously, it’s not going to happen without some major sacrifices and struggle.  Your ability to earn an income is clearly valuable to you, your spouse, and your family.

Insurance works to replace the income that your family would lose if you were to die unexpectedly or were disabled and unable to continue working.

With the proper amount of insurance, you’re making sure that the money you intend to earn in your working life will be there for your spouse or family to use.

One of the main benefits of life and health insurance is the peace of mind that comes with knowing the important people in your life will have financial security in the event of your death or serious illness. Some life insurance products can also help meet your retirement and savings goals.

Buying life insurance is a big decision.

While you may be thinking, “I’m young, I’m healthy…I don’t need life insurance,” the unexpected can happen. Wouldn’t you rather be prepared in advance?
Life insurance is for your survivors – a spouse, your children, and other dependents. It can also pay off your mortgage or help you put money away for your child’s education. It can also play a role in your retirement income. But more importantly, life insurance offers you peace of mind because it ensures the security of your family’s financial future.

Many people say “I have group insurance through work”, but in many cases it may not meet all your financial needs or always be available when you need it. One common measure of how much life insurance you’ll need (assuming you currently have none) is between seven and 10 times your current income. But this is only an estimate. The true figure depends on your total assets, the liabilities you leave your family and your family’s need for continuing income.

If you own a business or are involved in a partnership, you should consider corporate insurance. Our Certified Financial Planner can give you more details on business owned life insurance, discuss ‘buy-sell agreements’, key person coverage, and other options to find money to buy out a partner in case the need arises.

For more information contact one of our certified LCU Financial associates.


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