QUESTION (from a 42-year old married man):
I don’t know about life insurance. It’s a scam. I always hear stories about companies looking for reasons not to pay. This is an honest question – why does anyone need insurance?
QUICK ANSWER:
Life insurance is a quick way for your loved ones to access money to pay debts, and pay for a funeral without depleting their savings. When completing an application, be completely honest regarding your medical history.
MY RESPONSE:
I have been in the industry for almost 25 years, and I have heard stories of all types of claims being declined for all types of reasons. It is difficult for someone who is counting on a claim (life, health, disability) to be paid, only to learn that they do not qualify. If you hear a story from someone who experienced stress/anxiety and financial hardship due to a significant claim being denied, then rightfully the story will be told from a purely emotional perspective.
I know it may seem like insurance companies are some type of evil empire, but I would bet my home, my career, my reputation, that an insurer would never intentionally deny a legitimate claim. Never.
There is one main reason why life insurance has become a necessity: Capitalism. Since individuals (whether an individual company owner, or a decision maker at a university or college) can set the price for their goods or services, everything is expensive, and costs continue to rise. Homes, vehicles, vacations, schooling, clothing, child-care, pet care, groceries, eating out, Christmas; just to name a few things. The average Canadian carries a lot of debt. A mortgage is considered a “good debt”, but good or bad, you still owe money.
If you had passed away yesterday, who would support your wife, financially? Really, though.. would your parents pay the remainder of your wife’s mortgage? Would your brother pay off the loan on your car? Life insurance has become a straight forward and relatively inexpensive way to protect your family from financial burden if something happens to you unexpectedly.