Purpose of Life Insurance 

1. Estate Creation - with the proper financial plan and enough time to execute it, any individual can achieve financial prosperity. there are only two ways of creating

Therefore, should an individual die prematurely (before the master plan is accomplished), there should be enough money at work to provide for your beneficiaries.

2. Estate Conservation - once we have accumulated an estate, you will want a smooth transfer of property. this is the reason for estate planning. The major reason for estate planning is to keep your estate intact, minimize taxes payable at death and provide funds at the appropriate time to meet the immediate cash needs without liquidating any of your property (estate conservation; immediate cash needs).

Most of our financial planning is based on the assumption that we will continue to live long enough to earn the required income to achieve our objectives.

Different stages in our lives will require us to re-evaluate our position at regular intervals so we don't become exposed to any unnecessary risks. As a rule of thumb, a review should be scheduled at least every 2-3 years. It is possible that certain changes will warrant premature reviews, such as: the purchase of a new home or upgrading of company, spouse leaving or joining the work force, starting a business or a marriage breakdown.

Our insurance needs will go up and down in relation to our income and liabilities. without children, our insurance requirements are reduced. Once we have a family, the requirements for insurance are highest during the dependency period. (Usually 18 or 25 if they attend university). After our offspring become financially independent, the need for insurance declines.

According to statistics available through the Life Underwriters' Association of Canada, an individual will purchase life insurance an average of seven times during his or her life. And because of this, one should make sure that it be very flexible (premium, payment schedule and coverage flexibility).

Do you really need life insurance? The only purpose of insuring your life is to provide income for you dependants after your death. Therefore, the first question to ask yourself is "Do I have any dependants for whom I should provide after my death?"

If you are single or married without children or a mortgage, there may be very little need for life insurance. On the other hand, if your spouse, children or parents depend on your earnings, you may have to insure your life quite heavily.