The value of life insurance is most evident when someone dies. Until then, it can be mentally hard for some to keep making premium payments month after month.
When consumers pay for something, they want something of value in return. Yet, what is the value of having insurance if you never make a claim?
For those who have trouble adding a life insurance premium payment into their budget, we will shed some light on the value you get with life insurance, disability insurance, and critical illness insurance.
Is It Worth It to Purchase Life Insurance?
Most people have home and car insurance because it is required. While it is not mandatory to have life insurance, it does not have any less value than legally required insurance policies. None of us likes to think about a tragedy such as becoming disabled, critically ill, or dying. Nonetheless, these things happen to large percentages of people.
If one of these unfortunate incidents should happen, what would you have to lose? For example, have you considered how much less income would be coming into the household if a wage earner died? How would your lifestyle change after losing half or more of your income?
For instance, a stay-at-home parent performs many duties every day that barely go noticed. They cook, clean, buy groceries, take care of the kids, run errands, and manage an entire household. How much would it cost to hire someone to do the tasks the surviving parent could not manage on their own? Moreover, it is expensive to care for children when you consider things like extracurricular activities, medical bills, and college expenses.
What about funeral costs? Burial costs in Canada range between $5,000 and $10,000. Moreover, cremation is slightly less at between $2,000 and $5,000.
When you consider one or more of these issues, the small premium you pay for life insurance is well worthwhile.
Can I Ever Get a Refund on My Life Insurance Policy?
Term life insurance is much like car or home insurance, since you may never need to use it during the policy term; yet, you would incur a huge financial loss without it. Essentially, you are paying premiums in exchange for the chance of a financial loss.
It is unlikely to get a refund for anything you buy unless there is a valid reason. The same is true for life insurance. Refunds on life insurance policies are infrequent because life insurance is designed to protect your life for as long as possible.
There are special circumstances with term life insurance policies where it is possible to get a refund. At the end of a 10 or 20-year term life insurance policy, you may find yourself thinking, “I never made a claim on my insurance” or “Where did all the money I paid go?”
One of the ways you can get a refund is by canceling your policy within 30 days, as the law requires life insurance companies to refund your money during that period. Furthermore, if you pay a few months ahead and cancel the policy within 30 days, you may be able to get a refund for those months, too.
Those who are concerned about getting little for their money may want to add a return-of-premium rider on their term policy. If you do not die before the end of the policy term, the death benefit will end, but the insurance carrier would return the premiums you paid. Those who cancel their policies before the end of the term may receive a percentage of the premiums they paid.
While it seems like you get nothing in return if you never submit a life insurance claim, what you do get is peace of mind in knowing your beneficiaries will have some money after your passing. It is hard to put a price on that!
You cannot expect a refund on a whole life insurance policy, but you get to keep it for your whole life, and you may have cash value built up in the policy.
Is It Worth It to Purchase Disability Insurance?
Individuals who are young, healthy, and strong often cannot imagine a time when they will be anything but that. Yet, disabilities are more common than most people think.
Disabilities affect young people as well as old people, and they can encompass sensory, cognitive, or mental health, in addition to physical disabilities. Men, women, and non-binary people can acquire a disability preventing them from working at any time, as the following statistics show:
- Disabilities increase with age (13% for those 15-24 years to 47% for those 75 or older).
- Women have a 24% greater chance of acquiring a disability than men.
- Mental health disabilities are the most prevalent type of disability in youth (ages 15-24).
- Individuals between 25 and 64 years who live with disabilities have a less chance of being employed than workers with no disabilities.
Disability insurance helps replace your income in the event you cannot work due to a disability.
Is It Worth It to Purchase Critical Illness Insurance?
Illnesses such as cancer, heart attacks, coronary artery disease, stroke, or kidney failure, as well as many others, are considered critical illnesses which can be life-threatening.
What are the chances of acquiring a critical illness within your lifetime?
- The leading cause of death in Canada is cancer, and it claims the lives of over 28% of Canadians annually.
- About 641 people in Canada are diagnosed with cancer daily.
- About 233 people in Canada die from cancer daily.
- The second leading cause of death in Canada is heart disease.
- Adults over age 20 who live with a diagnosed heart disease have just under a 3% chance of dying from the disease.
Critical illness insurance provides a lump sum people living with a critical illness can use for any purpose including paying medical bills, providing income, or any other need.
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Final Thoughts
Everyone goes through periods of hard times in life. It is impossible to predict whether we will become critically ill or disabled. We do not know the day or hour of our eventual death. What we can do is plan for these events as best we can, and making an insurance claim can make life for those who are left behind much easier.
Why not contact Hometown Life insurance for a quote today to see how you can protect your family? Call 289-606-0103, and a licensed life insurance agent will be happy to help.
