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Life Insurance
Live comfortably knowing that your loved ones will be financially secure in the unfortunate event of your passing.
Why Do Canadians Need Life Insurance?
Life Insurance acts as a safety net for your dependents in the event of your passing. This protects them from financial hardships and can allow them to continue to maintain the same quality of living they are used to. Life Insurance is an absolute necessity if your spouse, children, or other individuals you care about, depend on you financially.
Depending on the coverage you choose, your Life Insurance policy can help offset or completely cover the costs of your funeral, any debts that you may have, and even provide your beneficiary with a source of income.
In addition, if you need to access your funds, certain policies will allow you to withdraw your accumulated premium payments. However, the amount paid out in the event of your passing will decrease if you do not pay back the amount withdrawn.
What type of Life Insurance should I get?
There two main types of Life insurance policies: Permanent Life Insurance and Term Life Insurance.
Permanent policies guarantee a pay out to the beneficiary if the insured passes away at any point in time as long as the premiums were paid. On the other hand, term policies pay out benefits only if the insured passes away within the agreed upon length of their policy.
Can I name multiple beneficiaries?
A beneficiary is the person who receives the cash value of your death benefit. As a policy holder, you will be required to name this person when you purchase your Life Insurance policy. You are able to name multiple beneficiaries and divide the cash value of your policy among them equally or according to a set percentage. This is useful if you are planning to divide the money amongst your children for example. If a beneficiary passes before you do, you can elect a contingent beneficiary in their place. You may also choose a charity as a beneficiary.
How much Life Insurance coverage do I need and How much will it cost?
The amount of coverage you need depends on your desired benefits for your loved ones and your current financial situation. If you are the primary income provider and have mortgage debt, financial experts advise to get at least 10 times your annual salary in coverage. Luckily, increasing the amount of coverage usually does not greatly impact your premiums.
The price of Life Insurance is based on the level of coverage and benefits you desire, as well as the age and health situation of the insured person. Young and healthy Canadians pay as little as $30 in monthly premiums, but rates will increase with age and health issues. This is why experts suggest purchasing a Life Insurance policy while you are still young and healthy.
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Types of Life Insurance in Canada
The two main types of Life Insurance policies are Permanent Life Insurance and Term Life Insurance.
Permanent Life Insurance
Permanent Life Insurance, also known as “whole life insurance”, covers you for your whole life. These policies ensure a pay out to the beneficiary if the insured person passes away at any point as long as the premiums were paid. It can sometimes build value over time. With Permanent Life Insurance, your premium is typically guaranteed not to increase.
Term Life Insurance
Term Life Insurance can generally be purchased for up to 30 years. Term policies pay out benefits only if the insured person passes away within the agreed upon length of their policy. Term Life Insurance is generally the least expensive.
Participating Whole Life Insurance
Participating Whole Life Insurance opens the doors to an investment component, which allows the insured to earn dividends and increase their coverage. Premiums from participating policies are pooled together and invested by the insurer. This increases their cash value.
Universal Life Insurance
Universal Life Insurance policies tend to have variable premiums that increase along with the policy holder’s age. These policies share the same qualities as Participating Whole Life Insurance plans while providing more flexibility. However, the policy holder is responsible for their own investments which will influence the cash value of their policy.
How to Save Money on Life Insurance?
We want to help you save your money. The best way to save money on Life Insurance is to compare rates from multiple providers. This can be extremely time consuming. Luckily, Alliance Income Services Corp. does all the hard work for you! By simply requesting a quote online through our website, we check what rates you can get from every major Canadian insurer.
What is your age?
Your age bracket has a significant impact on your premiums. The younger you are, the more we suggest purchasing a policy. Avoid higher rates by purchasing Life Insurance before your next birthday.
Are You Healthy?
If you are a healthy individual and can qualify for regular life insurance, apply for a fully underwritten policy to pay notably lower premiums.
Smoker status
Cigarette smokers can pay up to 100% more for the same level of coverage as a non-smoker. To gain a considerable reduction on your premium payments, consider quitting smoking. It will save you money and benefit your health.
Renewing Your Policy?
Over time, rates can change. Instead of renewing your current plan, compare new policies or consider converting your Term plan to a Permanent Life Insurance.