Life insurance is about one question: if you didn’t come home tomorrow, what would happen to the people you love? To answer that, you need a clear way to calculate how much life insurance you need in Canada.
This guide walks through a simple formula and shows how Mode Money Managers™ helps Canadian families turn that number into the right coverage.
1. Start with a simple coverage formula
A common approach is the DIME method:
Add up:
Then subtract existing savings and any current life insurance coverage. The result is a ballpark for how much life insurance you may need.
2. Adjust for your real life
Now adjust the number for your situation:
Mode Money Managers™ uses planning software to model cash flows after a death so you can see how long money would realistically last for your family.
3. Choose the right type of life insurance
Most families need a large amount of affordable coverage for 20-30 years while kids are growing and debts are highest. That usually means term life insurance.
You may also want a smaller permanent policy for estate planning or lifelong dependants. A typical structure is:
Because Mode Money Managers™ works with multiple insurance providers, they can shop the market for you instead of being tied to a single company.
4. Don’t ignore disability and critical illness
The bigger risk for most Canadians is not dying early, but being unable to work for a long period.
A complete protection plan includes:
Mode Money Managers™ can bundle these into one integrated proposal so you understand total cost and total risk reduction.
5. Review your coverage regularly
Review your life insurance every three to five years or when:
Mode Money Managers™ can schedule regular policy reviews as part of your overall financial plan so your family is never under- or over-insured.
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