Many don’t believe that life insurance is there to help you out when you least expect it. When you purchase term insurance, the purpose of it is to simply give you peace of mind with the hopes that you’ll never have to make a claim. However, the importance of it really comes through when one of the persons insured passes away prematurely leaving behind their loved ones to deal with the finances and children’s education.
Permanent insurance on the other hand can have multiple purposes because of its unique features. It can be a retirement income fund, estate planning tool, children’s education fund or just simply used as life insurance. Due to its ability of building up a tax-sheltered cash value, you can use it to loan from years down the road when something unexpected happens. This feature is especially useful when you’ve already maximized your Registered Retirement Savings Plan (RRSP) and Tax Free Savings Account (TFSA), looking for another tax-sheltered investment option.
Take the Page’s story for example. They purchased a Whole Life insurance policy when they were in their 20’s not knowing how much it was going to help them in few years when their child was born with spina bifida. Read more about their story and how life insurance helped them.
Disclaimer: While this is a story about an American family the same “Whole Life” policies are available to Canadian families as well.