How Much Life Insurance Do You Need?

How much

How much life insurance do I need?

The question is not really how much life insurance you need, it is how much money your family will need after you are gone.Three in four Canadian households are underinsured

Everyone’s financial circumstances and priorities are different but here are some questions to help you focus:

  • How much money will your family need to meet immediate expenses such as funeral expenses, legal fees and outstanding debts and mortgage balances?

  • How much money will your family need to maintain their standard of living over perhaps several years? This could include everyday living expenses, money for a child’s post secondary education, or your spouse’s retirement.

Average insured Canadian has much less coverage than is truly needed

The key to determining how much life insurance you require is really taking some time to do some research. Here are some steps to help with this evaluation:

  1. Gather all of your personal financial information and estimate what each of your family members would need to meet current and future obligations. This would include items such as funeral expenses, mortgage payments, car loans, credit card debt, education expenses, and replacement of your income.

  2. Tally up all of the resources that your family members could rely on to support themselves in the event that you pass away. Are there any savings or another income to rely on?

  3. Determine what the difference is between point #1 (obligations) and point # 2 (resources).

Existing resources including survivors earnings, savings, and investments and life insurance that you already own

This research will be the starting point for determining how much life insurance you actually need. After that, it is time to get further guidance and assistance from a qualified financial advisor. They will be able to tweak your research even further to reflect your personal circumstances, and from there come up with a customized financial plan to provide the necessary security for you and your family.


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Did you Know?

Did You Know?

73% of Canadians say they can't afford life insurance?1

Consider this

$84/month for coffee2 vs.
$27.90/month for life insurance3

Did You Know?

73% of Canadians say they can't afford life insurance?1

Consider this

$84/month for coffee2 vs.
$27.90/month for life insurance3


1 LIMRA: Canadian Life Insurance Ownership study, 2013.
2Based on a Starbucks cup of coffee at $2.45, purchased 31 days per month.
3Initial monthly cost for a healthy, 40 year old female, non-smoker purchasing $250,000 of Empire Life Simplofoed 20 like insurance as of December 7, 2016. Price increase every 20 years.