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Your Guide to Insurance

February 27, 2023

The Top 7 Benefits of Life Insurance

It’s not something we like to talk about, but losing a working-age partner or parent takes both an emotional and financial toll on a family. Our loved ones are more than providers of income, of course. But make no mistake: Their financial contribution would be sorely missed if they were to pass. So we should consider what the benefits of life insurance coverage are, and if we should protect our loved ones.

Life insurance protects our loved ones (you’ll hear them referred to as beneficiaries) against this risk. To put it simply, we buy it so that those we care about won’t go into debt if we die.

Besides the peace of mind that comes with a life insurance purchase, there are many other benefits for you and your loved ones. Here are seven of the best:

  1. Death benefits are paid out in a lump sum.
    Your beneficiaries receive payment all at once, and they’re free to do what they wish with it. They can pay down a mortgage or other debts, cover their living expenses, or invest in their future – it’s up to them.
  2. Payouts aren’t taxed like employment income.
    In fact, most of the funds paid out by life insurance policies are tax-free for beneficiaries. Work with a financial advisor or accountant to make sure your estate is set up in the most tax-efficient way possible.
  3. Some life insurance policies let you save and grow your money.
    Participating life insurance, which is a whole life product, offers more than just coverage. These policies provide guaranteed, tax-efficient cash values that you can borrow from in case of future emergencies. This type of insurance also offers dividends (similar to stocks). While they do come with risk, think of them as a long-term investment, with the opportunity to earn a lot more over your lifetime.
  4. Life insurance comes with additional optional benefits.
    This allows you to customize your life insurance to your unique needs. Talk to your financial advisor about your financial and protection goals, and they will advise you on which of these benefits are most suitable for you. (Note: Additional optional benefits must be purchased separately when you buy your policy.)
  5. Death benefits can be paid out to you before you pass.
    In the event of a terminal illness, you may be able to dip into your existing life insurance in the short time you have left. Some policyholders choose to pay health care expenses in this way, while others use the money to cross items off their bucket list before they pass. (Learn more.)
  6. If you can’t work due to an illness or injury, you have the freedom to pause your policy premiums.
    This is called a waiver of premium, and it comes in handy if you can’t afford the added monthly expense. Talk to your financial advisor about how this works.
  7. Your loved ones will be taken care of after you’re gone.
    That’s because you’re providing them with a layer of financial security that will protect them in your absence. The last thing you want is for them to be worried about money while they are grieving your loss.

To ensure you are getting the most value from your life insurance, talk with a Serenia Life advisor about your situation and your long-term financial goals and needs. Don’t have an advisor? Fill out this form to get started.

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