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Ask a Sault financial advisor: The ins and outs of life insurance

Local financial advisor, Jeff Viotto talks about the reasons to invest in a self-directed policy centred on you
Arranging life insurance isn’t necessarily top of mind for most people, but if we tie it to a particular milestone in our lives it starts to make a lot of sense (stock photo)

Arranging life insurance isn’t necessarily top of mind for most people, but if we tie it to a particular milestone in our lives it starts to make a lot of sense.

Village Media’s Content Studio spoke with Jeff Viotto, Financial Advisor at The Co-operators, about the reasons why people may not have life insurance, which type of policy is best and the perfect age to get started.

What are some of the reasons a person might not have life insurance coverage?

I think many people have a misconception about life insurance. They may find the concept complicated, be under the impression it may be expensive or that they cannot get it at all. We really try to simplify this process for our clients. I think we also want to avoid talking about the worst case scenarios. Nobody wants to believe that something could happen to them. However, this is a reality and if we can make it easy for clients to have this conversation, I think it goes along way to putting themselves on the right financial path. If they have the protection in place, they can enjoy their money guilt free knowing their family is taking care of.  

How much coverage do people typically need?

This is a difficult question because every situation is different. We utilize a specialized process to get you these answers. We want clients to know exactly what their life insurance need is and what their plans are going to do for their family if the unexpected happens. You should work with someone who can customize a plan for you. 

How do you determine which type of life insurance policy is the best one for you?

We take every client though a financial planning process to analyze their situational needs. This is a holistic process that really walks a client through why they may need insurance, how much and ultimately what plan would best fit both their needs and budget.  

Are clients right to worry about getting coverage if they have a pre-existing condition? 

No- worrying doesn’t get you anywhere. We have had so many clients not want to talk about life insurance because they assume they cannot get it or that it will be too expensive. This is simply not the case a lot of time. We review each clients situation and consult underwriting to see what the best options are. If we cannot qualify you through our standard market, we have other options at our disposal. It is better to know your options than make an assumption that can put your family at unnecessary risk. 

Do most people have life insurance coverage through their employers or are they arranging it privately? 

A lot of people buy mortgage insurance through the bank—this is intended to cover the mortgage value if something happens to you. A nice idea, but this doesn’t always happen in the real world. Also, what people don’t realize is that the coverage is decreasing as they pay down their mortgage but the bank is charging you a fixed price. Worse yet, this rate will increase as time goes on even though your mortgage value is getting smaller. If you have a future change in health, the bank may not qualify you on renewal of your mortgage. We encourage everyone to know their options because they can save a lot of money over the life of their mortgage with having private coverage through us. 

Under ideal circumstances, what age should a client be when first taking out life insurance?

The perfect time to apply for life insurance is today. The younger and healthier you are, the cheaper the insurance will be. The obvious time to do so is when you have debt or someone is financially dependant on you. However, waiting to take out a policy will become more costly not only because of your age, but you also run the risk of having a future change in health and either not being able to get insurance or having to pay a much higher rate. 

Are there options for those who can only afford to start a plan later in life? Is it too expensive at that point?

Yes- we can qualify you for a plan up to age 75 depending on your medical history. In my opinion, it can always be more expensive not to have it. You may be leaving your family with extensive costs that they must deal with instead of having us do that for them. 

Want to learn more? Email Jeff Viotto, Jordan Forbes or Justin Montanini, visit Co-Operators online or call 705-945-8844.