Life insurance provides money for your family when they need it most. When you pass away, various expenses will need to be paid, including funeral expenses, estate administration expenses, any taxes that may result from the “deemed disposition” of your capital assets, and any taxes that may result from balances in your RRSP or registered retirement income fund.
Your family will also need to pay off outstanding debts, such as a mortgage or line of credit. Life insurance helps to ensure that your family won’t need to sell other assets to pay for these expenses.
Some policies will also offer you a guaranteed estate value payout. This can then reduce some of the risk you are taking with your current investments, as you can have peace of mind knowing that your estate plan has been solidified.