Most people know the main reason for life insurance is to protect their loved ones from financial troubles caused by the death of an important family member and wage earner. But do people who live in Vancouver need more insurance than elsewhere?
Quite often the goal of life insurance is to pay off the mortgage and provide additional income to make up for the loss of an important wage earner. If that is the case, then the amount of life insurance coverage one needs in Vancouver has grown substantially over the last decade.
- One of the main reasons for this is that we typically have much larger mortgages than people in other cities in Canada and the US.
- A second problem that affects everyone these days is the low interest rate that is paid for any type of guaranteed investments.
Take a look at this income replacement chart.
In the current low interest rate environment, a wage earner who earns $72,000 a year would need over $600,000 of insurance coverage just to provide his/her family with a replacement income for the next 10 years. If the family also has a $400,000 mortgage, the amount of insurance coverage needed could easily be $1 million or more.
How much insurance do you have? How much should you have?
There are a number of factors that need to be discussed to determine the right amount of life insurance. Call us to review your insurance needs and your current coverage.
Insurance products provided through HollisWealth Insurance Agency Ltd.