This is a story about an immigrant couple who moved to Canada in their early 30s. Let's call them Jane and John.

As it is common with the immigrant community, they were quickly sold a Term Life Insurance by an agent who advised them to protect their lives and loved ones with life insurance coverage and invest the rest of their funds in other asset types.

This made sense to the couple, so they got a Term Life Insurance for themselves and continued to invest in RRSP, TFSA, real estate and other non-registered investments.

At the time they got their Term Insurance coverage, they were both 35 years old. Based on their family experience in their home country, their parents and grandparents had only managed to live upto ages less than 65 years old. So, they were pretty comfortable that a 30-year Term Insurance (T-30) will be sufficient for their needs.

As expected, the cost of a T-30 insurance was pretty affordable at a premium of $75/month for John, and $55/month for Jane. So, they had more than enough to invest elsewhere while their lives stayed protected with life insurance.

There was only one problem. They lived to be older than 65, the age when ther term life insurance terminates!

John had developed some health concerns at the age of 63 and expected to pass on before his 65th birthday. Shall we say fortunately, the Universe had other plans. He lived past that age but passed on 3 months after his 66th birthday.

Because their Term Life Insurance had now lapsed, that left the family with nothing to claim from the coverage. They had to source for funds from their personal savings and investments to pay for his funeral expenses, probate fees and final taxes.

This experience got the wife, Jane, thinking she needs to get another life insurance coverage in place immediately. By this time, she was already 66 as well. So, her cost of insurance for a 10-year Term Life Insurance was already over $260 monthly.

Considering that some of John's assets had rolled over to Jane, her passing will trigger significant amount of final taxes. So, she decided to get that insurance for another 10 years as this will last her till age 76.

Life can be tricky atimes. Jane refused to die before age 76, and lived until she was 80 years old. At this age, getting a life insurance had become unreachable and impossible for her.

Upon her passing, her family had zero claims to any insurance coverage because it had lapsed yet again.

With the probate process, funeral expenses and final taxes, the financial burden was quite significant for their children as they had to dip into their savings to sort things out while they awaited resolving other issues arising from Jane's will.

Throughout the period of their Term Life Insurance, they paid over $78,000. Yet, they and their beneficiaries were not able to enjoy any benefits from it because they lived longer than anticipated.

Are you planning for long life? Do you want this to be your story?

livenija:
Boring mode of advertising

tumababa:
imagine putting the amount in a bond or even savings. insurance na scam jare. except its compulsory, im not doing.