Insurance is more than just a safety net – it's a strategic tool that can protect you from unforeseen financial hardships. From car accidents to house fires, and even the complexities of inheritance taxes, insurance offers a means to transfer liability while securing your financial future.
To better understand the role life insurance can play in our financial planning, it helps to first consider how we use it in other areas, says Surrinder Varpaul, Senior Associate at World Financial Group.
When we buy a car, for example, the next logical step is to purchase insurance. This isn't just a legal requirement; by paying a premium, you transfer the potential financial burden from yourself to the insurance company in the event of a collision or theft. This transfer of liability is a fundamental principle of all insurance.
House insurance is another critical form of protection. Consider a family whose house caught fire. On average, the repair cost of a property fire could be anywhere from a few thousand to hundreds of thousands of dollars. Without insurance, covering this expense would be near impossible.
Similarly, other forms of insurance – life or critical illness, for example – act to protect our assets, not only for ourselves, but for our loved ones, and are a vital financial planning tool.
Depending on a person's assets, how they're held and their life situation, inheritance can be a complex and costly process, especially when it comes to capital gains tax on investment properties, Varpaul notes, recalling one recent case where a surviving spouse faced a $200,000 tax bill when both spouses pass the tax bill.
As a result, beneficiaries may be forced to sell inherited assets quickly, often at less than fair market value, to pay the tax bill.The solution is to incorporate life insurance into your estate planning, allowing beneficiaries to maximize the value of their inheritance, and reduce the financial stress at an already difficult time.
Critical illness insurance is another essential proactive tool that can help protect against the unexpected, such as heart disease or a cancer diagnosis. Critical illness insurance provides a lump sum payment upon diagnosis, letting individuals to focus on their treatment without the added stress of worrying how they'll pay the bills.
Whether for our car or home, unforeseen medical issues or estate taxes, insurance allows us to protect ourselves and our families from financial distress. By transferring liability through premiums, the right insurance ensures that unexpected events don't derail your financial stability.
For over two decades, World Financial Group, a proud Transamerica company, has been dedicated to guiding individuals and families towards financial security through comprehensive life insurance, retirement, and wealth-building strategies. Now, you too can benefit from their expertise. Reach out to Surrinder Varpaul at 604-908-7526, or email him at s.varpaul@gmail.com to start your journey towards financial stability.