While the words 'life insurance' may not have the aww factor found in rattles, snugglies, jolly-jumpers, or other baby items on your wish-list, they deserve a lot of attention. Ensuring your family has adequate insurance coverage is the crucial step to guaranteeing your child really will have everything they need, even in the worst-case scenario. The unfortunate reality is that there are just some things your great-grandmother's hand knit heirloom blanket can't cover.
Getting the right insurance can help protect your family's overall financial stability.
Term Life Insurance
A term life insurance policy is a financial safety net for you and your child. The proceeds of your term life insurance policy can help cover living expenses such as mortgage, childcare, or even other day-to-day bills like groceries or taxis.
A good rule of thumb when considering term life insurance is coverage for both parents with a death benefit that pays out enough to replace the loss of one parent's income for approximately 25-years. While money will never replace a parent's love, it can help mitigate unwanted stresses during challenging times.
And because your needs change over time, you can choose to end the 'term' of life insurance coverage whenever you want to.
Short-Term Disability Insurance
It’s easy to overlook the benefit of having short-term disability insurance until the need for it is knocking at your door.
Typically lasting for just a few months, short-term disability insurance usually comes into effect quickly (within a week or so of injury or onset of illness). It also helps to protect your most valuable asset as a working parent: your ability to earn a continuous, uninterrupted income.
In addition to other benefits such as Federal government or employer-paid, short-term disability can often cover the shortfall during a brief time away from work, working reduced hours, or earning reduced wages due to rehabilitation requirements.
And not having to worry about how you're going to make your next mortgage payment will help speed your recovery.
Long-Term Disability Insurance
No one ever plans on getting sick, let alone being unable to work for an indefinite period. But with a maximum Canadian Pension Plan disability benefit of $1,362.30 per month (regardless of where you live in Canada, number of dependents, or cost of monthly medical bills) long-term disability benefits are something every parent should consider.
Long-term disability benefits often begin several months following your initial injury or onset of illness. Depending on your coverage, long-term disability coverage can even carry you for the years between when you stop work and when you retire.
For maximum coverage, consider short-term disability for coverage immediately following an injury or illness, and long-term disability benefit to begin once short-term benefits have been exhausted. These can often be coordinated to dovetail seamlessly without intrusion into your daily life.
Wondering Where To Begin?
Start by evaluating the policies you already have in place. Looking at your current insurance needs with an eye to the future can help you decide the right amount of coverage to protect your family when you need it most.