Life insurance made easy

Life insurance, simply put, is insurance that will pay out a death benefit (lump sum of money) to a beneficiary (person you name who you want the money to go to) upon the death of the life insured. The cost of life insurance varies based on a number of factors, such as, the age of the insured, smoking status, current health, and expected life expectancy. In exchange of premiums paid (monthly or annual payment made to insurance company), the insurer guarantees to pay a set amount of money to your beneficiary if you pass away during the life of the policy.

Life insurance is a cash payment that can be used to cover any expenses that you leave your family behind with.MortgagesFuture education expenses for your kidsLiving expenses for your family to maintain current lifestyleChild care expenses if you have young childrenFinal expenses (burial, estate taxes, etc)In short, life insurance covers off so many things, many people have different level of coverage they will need during different periods of time, some with an expiry date and some that are permanent needs. This is why you should discuss with your advisor the different life events that will bring on different needs and what applies to you.

It s impossible to say, because the kind of coverage that’s right for you depends on your circumstances and financial goals. But, as stated it is highly recommended that you look at creating a plan that utilizes a combination of both. Term offers the greatest coverage (death benefit) for the lowest initial premium and is a great solution for people with temporary needs or a limited budget. Permanent insurance on the other hand, may make more sense if you anticipate a need for lifelong protection, or if the option of accumulating tax-deferred cash values is attractive to you. Often, a combination of term and permanent insurance is the right answer.

Term life insurance covers you for a set period, such as 10, 20 or 30 years, and is the most affordable way to protect your family, mortgage and income. Whole life insurance covers you for life and builds cash value, so it costs more but suits estate planning and leaving a legacy. Many families combine both.

Determining how much life insurance you need requires an examination of your current and future financial obligations, along with the resources your family could tap.Your future obligations are a combination of what it would cost to help your surviving family members meet immediate and ongoing needs like funeral costs, taxes, food, clothing, utilities, mortgage payments, and your future obligations like college and retirement funding.The resources that your surviving family members could draw on to meet those obligations include your spouse’s or partner’s income, savings and investments, other income producing assets, and any life insurance you might already own.The difference between the two—your financial obligations minus the resources your family has to meet those obligations—is the approximate amount of additional life insurance you need. If this sounds confusing, you’re not alone. That’s why most people turn to a qualified insurance professional when they want to figure out how much insurance they need.But if you don’t feel you’re ready to speak with an agent or want a preliminary sense of your needs before meeting with an agent, visit our Life Insurance Needs Calculator. It will walk you through the various questions you need to ask yourself and provide you with a rough estimate of how much life insurance you need to protect your family.

Most people name a spouse, children or another family member. Naming a beneficiary means the payout goes directly to them, usually tax-free and outside your estate. If you name minor children, consider naming a trustee, because minors cannot receive the money directly.

Yes. No-medical life insurance uses health questions instead of blood tests or exams. Simplified issue plans ask a few questions; guaranteed issue plans ask none but have lower limits and a waiting period before the full benefit is paid. If you are healthy, a fully underwritten plan is often cheaper, so compare both.

Yes. Most insurers treat any nicotine use in the last 12 months, including vaping, cigarettes, cigars and nicotine gum, as smoking, and smoker rates can be about double non-smoker rates. If you quit for 12 months, ask to be re-rated at non-smoker rates.

Yes. Permanent residents can usually apply right away. Many insurers also accept work permit holders who have lived in Canada for a minimum time and plan to stay. Requirements differ by insurer, so tell us your status and we will find insurers that accept you.

Joint life insurance covers two people on one policy. First-to-die pays out when the first person passes away and is often used to protect a shared mortgage. Last-to-die pays when the second person passes away and is often used for estate planning. Two separate policies cost a little more but give more flexibility.

Child life insurance is inexpensive and locks in insurability, so your child keeps coverage even if their health changes later. Some whole life plans also build cash value. It is usually a lower priority than covering the parents first.

Many policies contain a provision that allows a terminally ill person to collect a significant portion of his or her policy’s death benefit while still alive. The money can be used to get family finances in order, pay for uncovered medical expenses, or simply do certain things for your family or friends while you still can. It’s important to note that the amount taken out while still living is subtracted from the death benefit payments your beneficiaries receive, along with an interest charge for early payment of benefits.

Think twice before you do, because in many situations it may not be to your advantage. Before dropping any in-force policy, consider:If your health status has changed over the years, you may no longer be insurable at standard rates.Your present policy may have a lower premium rate than is required on a new policy of the same type, if only because you’re older.If you replace one cash-value policy with another, the cash value of the new policy may be relatively small for several years and may never be as large as that of the original one.You will be subject to a new contestability period.You should ask insurance agents for a detailed listing of cost breakdowns of both policies, including premiums, cash-surrender value, and death benefits. Compare these along with the features offered by both policies. If you decide to surrender or reduce the value of the policy you now own and replace it with other insurance, be sure that:The agent making the proposal puts it in writing.You pass any required medical examination.Your new policy is in force before you cancel the old one.

To locate a qualified insurance agent or other financial professional, seek recommendations from friends, or professionals like your lawyer or accountant.Ask about the person’s experience and background and make sure he or she specializes in the service and products you need. You also may want to ask the person if he or she has received any special certifications such as Chartered Life Underwriter (CLU) or Chartered Financial Consultant (ChFC). These designations mean the person has taken advanced courses and may have specialized training and knowledge from which you could benefit.Above all, you want to select an agent or advisor who listens well and will take the time to understand your unique goals and desires. You can also use our Agent Locator to get started.

Yes. Most life insurance policies in Canada have a free-look period, usually 10 days after you receive the policy, when you can cancel for a full refund of premiums paid.