Many dads don't know how much life insurance they own: RBC Insurance Poll

Seventy per cent of Canadian fathers have a life insurance policy, yet two-in-five don't know how much it's worth

TORONTO, June 4, 2013 /CNW/ - Most Canadian fathers have a plan in place if something were to happen to them, according to a recent RBC Insurance survey. With 70 per cent holding life insurance, dads are making financial decisions with family in mind, yet almost 40 per cent of them don't know how much the policy is worth or how much their families will need.

"Dads view purchasing life insurance as the responsible thing to do. Their top reasons for purchasing a policy include income for their partner and children; paying off the mortgage; and financing their children's education," said Cathy Preston, vice-president, Life and Health, RBC Insurance. "And it's no surprise that our survey found that it's the big life events, such as marriage and having children that trigger their investment in life insurance."

Almost 40 per cent of men purchased or upgraded their policy when they got married and 76 per cent did so when they became a father. While half of fathers estimate they hold policies worth between $100,000 and $500,000, many dads believe they need, on average, another $380,000 of coverage to feel secure.

"Life insurance is one of the simplest and most affordable ways to protect the financial future of families. It's clear from the findings that far too many Canadians don't know how much their life insurance policy is worth, nor how much they need," said Preston. "Today's families are busy, so convenience and simplicity are important when purchasing a policy. You also want to ensure that you are getting the best value for money."

As for the 30 per cent of fathers without a policy, almost half (44 per cent) say they have enough investments and other financial resources, or that their household income will ensure the family is protected.

Based on these findings, what should Canadians know about life insurance?

RBC Insurance offers these tips:

• Life insurance works by providing beneficiaries with a tax-free benefit after the policy holder's death. This money can help pay off loans and debts; maintain lifestyle and pay day-to-day expenses; pay for children's education and cover expenses like funeral costs, while protecting retirement or rainy day savings.

• While major life events, such as getting married and having children, motivate people to buy life insurance, Canadians need to re-evaluate their needs as their family grows and changes.
  
  
• Life insurance should be tailored to suit an individual's budget, lifestyle and needs at every stage of life — and offer the flexibility to make changes as needs evolve.
  
  
• Employer-provided plans can leave families unprotected because coverage amounts may be insufficient and may not continue if the individual leaves the job or becomes disabled.

About the RBC Insurance Poll
The RBC Insurance Poll was conducted online via Ipsos Reid's national I-Say Consumer Panel to 1,127 Canadians parents. Weighting was then employed to balance demographics and ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. Data collection was March 27 to April 5, 2013. The accuracy of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±3.3 percentage points of the entire Canadian parent population.

About RBC Insurance
RBC Insurance®, through its operating entities, provides a wide range of travel, life, health, home, auto, wealth and reinsurance products and solutions, as well as creditor and business insurance services, to individual and group clients. RBC Insurance has more than four million clients globally. We are one of the largest Canadian bank-owned group of insurance companies and among the fastest growing insurance organizations in the country. RBC Insurance employs more than 3,200 employees around the globe, and is the brand name for the insurance operating entities of Royal Bank of Canada.

SOURCE: RBC