John, a 30 year old web consultant, is married to Brenda who is 28 years old and has decided to stay at home to look after their two young children. They recently purchased their first home and realized that it would be a good idea to review their life insurance needs.
After reviewing their situation, we decided that John would purchase enough insurance to replace 70% of his income over the next 20 years, to cover off the outstanding mortgage, and to provide for post secondary funding for their children.
Kelly would purchase enough insurance to provide funding for child care, to cover off the outstanding mortgage, and to provide for post secondary school funding.
Considering their stage in life, and limited resources to fund their insurance needs, Term Insurance was the obvious choice. This will provide them with the most amount of coverage for the lowest premium.
Two plans were recommended: 10 year Term and 20 year term.
They decided to go with the 10 year Term, with an option to increase the term to 20 years without medical evidence should they choose to do so.
- The plans are guaranteed renewable and convertible, so once they have more cash flow, they will be able to convert all or a percentage of their coverage to permanent coverage. This will satisfy their needs for coverage when they get older as Term Insurance gets prohibitively expensive as time goes on.
- After deciding on the amount and type of coverage and after completing the underwriting process they were granted a discount on their original quote due to their healthy lifestyle!