Dads aren’t savvy about life insurance

While 70% of Canadian fathers own a life insurance policy, 40% don’t know how much the policy is worth or how much their families will need, finds an RBC insurance survey.

While half estimate they hold policies between $100,000 and $500,000, many believe they need another $380,000 to feel secure.

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“Their top reasons for purchasing a policy include income for their partner and children; paying off the mortgage; and financing their children’s education,” says Cathy Preston, vice president, Life and Health, RBC Insurance. “And it’s the big life events, such as marriage and having children that trigger their investment in life insurance.”

In fact, 40% purchased or upgraded their policy when they got married and 76% did so when they became a father.

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As for the 30% without a policy, almost half say they have enough investments and other financial resources, or that their household income will ensure the family is protected.

Here’s some information to educate and protect fathers for worst-case scenarios.

• Life insurance works by providing beneficiaries with a tax-free benefit after the policyholder’s death. This money can help pay off loans and debts; maintain lifestyle and pay day-to-day expenses; pay for children’s education and cover expenses like funeral costs, while protecting retirement or rainy day savings;
• Life insurance should be tailored to suit an individual’s budget, lifestyle and needs at every stage of life — and offer the flexibility to make changes as needs evolve;
• Employer-provided plans can leave families unprotected because coverage amounts may be insufficient and may not continue if the individual leaves the job or becomes disabled.

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