Life insurance is an important way to protect your family’s financial security by:
- protecting your family’s standard of living
- meeting your outstanding mortgage, debts, expenses, taxes, etc.
- meeting final expenses
How Much Do You Need?
If you don’t have dependents, you need sufficient coverage to settle debts and final expenses.
If you have dependents, you need considerably more coverage. A rule of thumb is coverage for at least five times earnings and even more if you have a young family and a substantial mortgage.
You need enough insurance to:
- pay off the mortgage, debts and final expenses, and
- generate investment earnings to replace your after tax income without eating into the proceeds.
Insurance proceeds of $1,000,000 at 5% interest would replace a $50,000 income (before taxes). If the proceeds are required for daily living expenses, they will at some time run out and your family would then have to reduce other assets to provide support.
Also consider that inflation will erode the value of the insurance over time.
Type of Insurance
The term insurance provided by this program provides maximum coverage for minimum cost, since only insurance is involved.
Other forms of insurance provide cash values or savings components in addition to insurance, and of course cost substantially more. Cash value insurance is generally an ineffective form of investment when compared to other types of investments.
Term Life Insurance
- coverage available in units of $7,000, to a maximum of 364 units ($2,548,000)
- at age 65: units reduce to $3,500, to a maximum of 364 units ($1,183,000)
- at age 70: units reduce to $2,100, to a maximum of 10 units ($21,000)
- Evidence of Good Health is required, unless purchased as a Resident through the PARIM program.
- any physician paying dues to Doctors Manitoba is eligible to participate; program available only to Doctors Manitoba members and affiliates