Why Is Life Insurance So Important? An Industry Perspective

A number of industry experts and thought leaders weigh in on why life insurance is so important. Click on the thought leader’s picture below to explore their perspective.

“Financial instrument that creates such powerful leverage…”

Neil Paton Partner, President and Chief Executive Officer at The Edge Benefits

As someone who has spent the vast majority of my career in the income protection business, I have seen close up both the phenomenal power of how tax free life insurance proceeds create outstanding financial security, and how not having life insurance creates significant financial hardship.

I know of no other financial instrument that creates such powerful leverage as it takes such an insignificant monthly premium and turns it into a significant tax-free lump sum payment that literally changes lives.

There is no shortcut to creating true peace of mind for clients today knowing that themselves, their families, and their businesses are financially secure because their income has been protected from an unexpected injury, illness, or premature death.

If you truly love your spouse and your family, prove it by making sure that your income, and their financial security, is adequately protected.

“When it hits so close to home, you truly understand the value…”

Terri Botosan, Chief Executive Officer of HUB Financial Inc.

You know, this is a question that I thought I had a clear understanding of for many years. I entered the industry in 1986 and as I learned more about the product that we are providing to Canadians, the more important I thought it was. I have always been proud to be a part of this industry but I have to admit, in those early years, while I was in my 20s, I really didn’t understand the impact at all. I had heard the stories about families impacted by the life insurance they had on a loved one and sometimes, the stories about the lack of life insurance. I recognized how valuable this product is.

That all changed for me about 10 years ago when a very close friend was diagnosed with brain cancer in his early 40s. The impact that life insurance had on his wife and special needs child was profound. Their lives would never have been the same without it. When it hits so close to home, you truly understand the value.

We talk about it often at Hub… We are proud of the role we play in this industry and will do whatever we can to support the advisors that bring this remarkable protection to businesses and families.

Doug Paul, Vice President, National Sales and Distribution, SSQ Insurance

“Life insurance is the ultimate selfless purchase…”

They say life insurance is the ultimate selfless purchase, because you certainly are purchasing something that some would say you will not directly benefit from. It is true that you purchase life insurance so your spouse/partner and/or family and/or business partners can have the financial security and resources to continue living and working uninterrupted financially. This is a huge gift that you provide to those you love and respect.

I also believe there is a self-interest benefit to purchasing life insurance beyond the legacy benefit of being remembered as someone who cared and loved! There is the immediate benefit of knowing and living with the knowledge that you have taken care of those you respect and love. Knowing that your selflessness will result in making other’s lives better makes one proud, and results in a self-peace and confidence that can only increase self esteem.

So, insure yourself for others, by all means, but insure yourself for you as well, and be proud of your decision. If this isn’t enough reason for you, then do it just so you can beat the tax man once in your life!

“Life insurance is stability in a world of volatility…”

Mike Aziz – Chief Distribution Officer – Canada Protection Plan

Working for Canada Protection Plan has given me a new way of looking at the answer to this question. Life insurance is the foundation of any good financial plan. It’s an affordable, guaranteed way for us to make sure that, when we die, our family, loved ones or business partners won’t experience unnecessary financial hardship and can offer additional benefits to use while we’re alive.

But at Canada Protection Plan, I’ve seen how important it is for people with common health conditions such as cancer, diabetes, or heart disease to get life insurance. They deserve as much as everyone to be able to protect their loved ones, but find it difficult or even impossible to get coverage from traditional companies. The same is true for the many people, young and old, who now participate in what used to be seen as “high-risk” sports.

Life insurance is important because it helps us protect those we care about from the unexpected. We’re living today in a world of the constant, rapid unexpected; where an entire generation has delayed significant life events such as buying a home or having children and another finds itself caring for young children and aged parents simultaneously; where the COVID-19 pandemic has resulted in a global health and economic upheaval. Ultimately, life insurance is stability in a world of volatility.

“Think about insurance logically and buy it out of a sense of responsibility…”

Tony Bosch Executive Vice President, Broker Development – Hub Financial

We have a habit of thinking about insurance logically and buy it out of a sense of responsibility. We know that if we buy a house it is our responsibility to insure that debt and that when we have a child it is only prudent for us to protect them by insuring our lives. We begrudgingly pay the premium because it is the responsible thing to do.

The true value of owning insurance occurs on the night that we are driving on a snowy, icy, highway and wonder if we will make it home, or when we receive an unexpected diagnosis from a doctor – when an event suddenly shakes our world and our thoughts are shifted from the mundane routine of life to “what would happen if …?” It is times like this we grasp for certainty and ask ourselves, “what is the worst-case scenario?” Our thoughts and emotions go to those who matter most in our lives and knowing that if we do not make it home, our family will be taken care of financially. We reflect on past decisions and the prudent decision to financially protect the ones we love. In times of financial turbulence, life insurance can be the greatest asset we own.

My hope is that you do not have to face a life experience that highlights life insurance’s true value. But if you do experience one of those life events, your thoughts will turn to “how much do I have, and will it pay.” Working with a good insurance advisor ensures a positive answer to both those questions.

“Nothing else can do what life insurance can do…”

Jim Ruta BA RHU EPC President, Advisorcraft

Nothing else can do what life insurance can do. Not an investment. Not a stock. Not a savings plan. Not a bond. Not a mutual fund. Not an ETF. Nothing.

Nothing else can deliver the exact amount of tax-free cash at exactly the right time to cancel a mortgage and all debts, provide a guaranteed lifetime income to a surviving family to keep them together, put the children through university and brighten their future, pay income taxes and expenses and relieve that burden on the death of a prudent and responsible breadwinner. It keeps businesses alive and employees employed when owners die. It preserves business’ sweat equity. It provides the money that makes wills work and keeps dreams alive after dreamers are gone. It’s your own private, pre-paid GoFundMe page for family financial security. It can even provide a little immortality for grandmas and grandpas when used right.

You can also be the beneficiary of your own life insurance policy while you are still alive. There is no other product that can guarantee an exact amount cash at an exact date, many decades in the future – like life insurance can. This amount is unaffected by stock market volatility, can only go up in value, is guaranteed by the strongest and most regulated world-class institutions, and provides financial peace of mind during pandemic lockdowns. It can provide tax-free cash to: augment retirement income, carry through job-loss, provide cash for special needs, and minimize the need of long-term care or home care.

Life insurance is so important because there is nothing else that can do what it can do to protect families, businesses, and futures. It’s more important than financial planning because it guarantees financial planning in advance. It is the ultimate character product.

“It requires a plan and sufficient life Insurance to fund that plan…”

Lawrence Ian Geller L.I. Geller Insurance Agencies Ltd.

When I first began in insurance, I was young and thought all death claims would be either young people who had accidents, or old people. Then my friends started dying, generally from cancer, but not always. These were people with young families who had most of their life ahead of them. After they died their spouse and children were still there. The mortgages were still there, and so were other debts. The family needed to eat and clothe themselves. The children still had their schooling ahead of them, and like many would benefit from outside activities and camp. The houses needed to be heated and maintained, and a car is almost essential for most. All of this costs money that the remaining spouse would not have had without a life insurance policy on the deceased spouse. Often, one income isn’t enough, and it was often the higher income spouse who died. All of my friends’ families would have been in dire straits without the funds from insurance policies arriving at just the right time.

Over the past 40+ years I have cried at many funerals, and many family members have come up to me after the funeral to thank me for making sure that they had the funds to go on. Sometimes I am approached by the spouse of a deceased client and each time they see me (often at another funeral) they thank me, again and again. Mortgage insurance and creditor insurance alone would not have made that difference. Nor would group life insurance. It requires a plan and sufficient life insurance to fund that plan. The great thing about what we can do as insurance agents is that we can make a difference, and that can make for a very fulfilling professional life.