10 Things Your Life Insurance Should Pay

by Tax Guy - Burlington Accountant on December 10, 2009 Print This Post Print This Post

Do I really need life insurance? Many of us hate to think about our own death. But what would happen financially to your family if you were to pass away?

Would your family be able to cope without your income? Will your family have to move out of their house? Will your children be able to attend university?

These are just a few of the questions we need to ask ourselves. The simple truth is that determining ho much is needed and for what can usually be quantified.

  1. Funeral expenses
  2. Legal fees (to settle your estate)
  3. Income tax liability (capital gains at death)
  4. Probate fees
  5. Loan repayment
  6. Mortgage repayment
  7. Create an emergency fund for your family
  8. Fund your children’s education
  9. Pay bequests to family, friends, or to charity
  10. Replace your income for a period of time (this is a present value calculation)

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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{ 2 comments }

Michael James December 10, 2009 at 10:07 am

How about using life insurance to make a secret payment to someone you don’t want your spouse to know about? Preet described an interesting story about setting up life insurance to provide money for secret children in such a way that the spouse wouldn’t ever find out about the insurance or the secret children:

http://www.wheredoesallmymoneygo.com/secret-children/

This isn’t the sort of thing to make a top 10 list, but it is amusing.

Tax Guy December 10, 2009 at 10:44 am

@ Michael:

Interesting. It would certainly be possible to have secret beneficiaries.

Thanks!

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