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Life Insurance For "Non-Working" Spouses
Will Planning


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The opinions expressed herein are my own personal opinions and do not represent my employer's view in any way.

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# Wednesday, August 23, 2006
Wednesday, August 23, 2006 5:32:31 PM (GMT Daylight Time, UTC+01:00) ( General Life | Mortgage Insurance | Term Life | Whole Life )

Life Insurance For "Non-Working" Spouses

Generally, when people think of life insurance, they think of insuring the potential income that will be lost when that individual passes away. However, serious consideration must be given to not only to lost income, but the amount of money it will cost to maintain the household when one member dies.

A stay at home parent can be overlooked in terms of financial planning. While technically there is no loss of income, there will be a significant increase in expenses if the caregiver should suddenly die. Therefore, we highly recommend that both parents carry life insurance, not only to protect the family assets, but also to ensure that it is financially possible for the surviving parent to provide quality care for the children.

In planning for the amount of insurance for the stay at home parent, ask yourself (and your spouse) these questions:

  • How long would I plan to take a leave of absence from work in order to make the transition smoother for my children?
  • What kind of care would be best for my children? A nanny, housekeeper, daycare? Remember that these needs will change as your children get older, so this issue needs to be revisited every few years.
  • Have we made the appropriate arrangements to ensure quality education for our children?

Talk to your spouse about how best to care for your children in the event of the death of the stay at home parent. Your insurance agent is a great resource in helping determine the amount of life insurance you will need in order to meet your projected needs. It is a good idea to remember that as the cost of living goes up, you should re-evaluate your needs every few years to make sure that you will be insured in the amount necessary to allow for the best care possible. Consider using our online insurance calculator to see how much term life insurance is required to cover your needs.

NOTE: Blue Vision from Ontario Blue Cross offers disability insurance to stay-at-home spouses. Contact us for more information.

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# Friday, August 11, 2006
Friday, August 11, 2006 5:59:03 PM (GMT Daylight Time, UTC+01:00) ( General Life | Whole Life )

Buying life insurance is the first step in preparing for the future. However, it is very important to ensure that your life insurance policy is distributed in the manner in which you intend. This can only be accomplished by a legal will. Proper will planning can not only ensure the preservation and protection of your assets during your life time, but also an effective transfer of assets in a tax-effective manner and the continued preservation of property.

Be aware that the laws differ depending on the province in which you reside. Before you start to plan your will, check with your province’s current legislation regarding wills. Remember that legislation does change, so make sure you are using the most current information available. Consulting with a lawyer is always recommended.

Your will serves several different purposes:

  • It designates who will administer your estate.
  • Sets out the manner in which you intend your estate to be distributed, and controls the time and manner in which your assets are to be distributed.
  • Designate the age when a minor is eligible to inherit.
  • Make provisions for a disabled minor.
  • Specify which outstanding debts which are owed to you are either forgiven or still outstanding.

Once your will is written, it is important to remember that it is not irrevocable. At any time, you can amend your will as circumstances change. A codicil can be added stating minor adjustments to your will. Remember to check your province's legislation regarding marriage; as marriage can revoke your existing will, unless specific provisions in contemplation of marriage are already stated. Also check your province’s definition of spouse to whether it includes common-law or same-sex spouses.

Division of your estate is a key consideration. It's a wise decision to have a consultation with a lawyer. A lawyer will help you determine the status of your assets and liabilities, and advise you on the distribution of your estate.

The value of your estate (residue of the estate) is the balance left over after expenses associated with burial, taxes, etc. have been paid. This is the amount that will be left to your beneficiary/beneficiaries. Depending on your province of residence, different legislation will determine the rights of your beneficiary/beneficiaries. Your lawyer will have the necessary statutes to advise you of the best way of dividing your estate. 

If you are planning on naming a minor as a beneficiary, it is usually advisable to set up a trust. Unless otherwise stated in your will, the minor will receive their bequest at the age of majority (ages differ according to province). In this case, you will need to appoint someone you trust as the trustee of the minor's trust. You can specify in your will the circumstances (education expenses, etc) in which the Trustee may use trust funds in order to provide for the minor.

If you are a parent, you must consider the guardianship and custodianship in the event that you (and your partner, if applicable) die at the same time. Consult with your lawyer about the laws in your province concerning custody and guardianship. It is important to remember that the trustee of your child's trust does not have to be the same person you designate as the custodian of your child. Choosing a guardian for your child/children is a very important decision, and requires careful consideration and planning. Discuss your thoughts and concerns with your lawyer, who can advise you of the best course of action.

Planning a will does not have to be a confusing experience. Even if you do not want a lawyer to draw up your will, and choose to do it yourself, we strongly advise consulting with a lawyer. A lawyer can help you through the legalities of your will, and also ensure that your wishes are carried out.

Please note that is NOT engaged in rendering legal or accounting advice.

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