Last updated on July 28th, 2021 at 04:43 pm
Photo by Scott Graham on Unsplash
Life insurance can be a complicated subject. After all, as a cornerstone financial tool it offers multiple options with various conditions ranging from the term of the policy to its payable amounts with everything in between.
That is why, our team has answered some of the most common questions concerning the most popular type of life insurance, namely, term life insurance.
Does term life insurance require a medical exam?
Some companies offer policies without the medical requirement exam requirements. Those policies typically charge higher premiums as the insurance company assumes more risk blindly. For the same reason, you typically cannot get insured for an amount greater than $250 000.
Medically underwritten policies require a medical exam to assess the risk of dying more accurately. These policies are cheaper than those that do not require a medical exam and their coverage amount can be well over a million dollars.
Why does term life insurance often offer the best value for customers?
Term life insurance is a great value for most people because it meets all coverage needs at a great price with no frills and unnecessary costs. You might wonder how affordable it is. Think: less-money-than-your-cable-bill affordable.
Does term life insurance go up every year?
Most term life policies do not go up in cost every year. However, premiums for ‘annually renewable’ term life insurance policy go up every year upon renewal as the life insured ages.
Can life insurance have more than one beneficiary?
Absolutely, almost all insurance companies allow you to have more than one beneficiary and up to ten. A primary beneficiary is the first individual that the death benefit would be paid to.
Contingent beneficiaries would be contacted if the primary listed beneficiary passed away. Most people are advised to list one or two primary beneficiaries and one contingent beneficiary. It is a good idea to check your beneficiary list regularly to make sure that the contact information is up to date.
Is life insurance taxable to the beneficiary?
Any death benefit amount is tax-free in Canada. However, any interest you receive from your policy is taxable and you are required to report it just as any other interest you receive. This only pertains to permanent policies with an investment component.
Does term life insurance expire?
Yes, term policies expire upon the designated policy length or if you fail to pay a premium within the 30 day grace period past the due date. Make sure that your term policy has a guaranteed renewability feature which provides coverage after policy term length lapses and keep in mind that it’ll be significantly more expensive due to age and possible health issues.
It is also very important to revisit your life insurance needs during such milestones as having a baby, a divorce, or acquiring a significant amount of debt.
Does term life insurance cover death from illness?
Yes, a term life policy will pay a death benefit in case of a death from illness when it was acquired or developed during the life of the policy. This is the risk that life insurers accept when covering a life of any individual.
For the same reason, it can be difficult to get coverage if you already have a life-threatening or chronic condition of some sort. In addition, it may be considerably more expensive.
At Arbetov Insurance, we take your needs just as serious as our own. With a wide variety of insurance products to choose from, we can offer a solution that is suitable for your situation. Contact our Insurance Advisors if you have any questions about Life Insurance or any other type of health insurance and we will be happy to help!