Life Insurance Coverage For Canadian Residents
Here are some reasons to consider getting a Life Insurance policy:
While thinking about what we leave behind once we are gone could be stressful, it is also a perfect time to plan out your financial strategy in order to provide your family members with a sense of security and care once you depart.
That is why, with a comprehensive Life Insurance policy your loved ones can inherit a substantial amount of money without having to pay taxes for ensuring their financial stability for years to come!
You might be wondering whether getting a Life Insurance policy is a wise decision. Below you will see some of the reasons for signing up for such a policy:
– Support your family members, if the the source of income is lost.
– Pay off your taxes to save wealth for inheritance.
– Pay off your financial debt i.e mortgage, loans and lines of credit, etc.
– Charitable Contributions.
– Source of savings and investment growth.
At Arbetov Insurance we want you to know how life insurance works and what we can do for you to satisfy your needs in the future. Not being insured is a big responsibility since you may have family members dependent on you.
Getting life insurance can be complex as there are so many products on the market which makes it almost impossible to find the right coverage without an experienced advisor.
If you a young professional taking care of your family, getting Life Insurance is a wise choice to make since it will replace your personal income you contribute to your family’s financial well-being.
Yet, you can also purchase a suitable Life Insurance policy even without dependents, which can cover the cost of your funeral or act as a mortgage insurance for your first home.
If you have dependents to provide for in addition to mortgage, you would aim to cover all of these things plus give your family some extra room with additional money to replace your income for a few years.
Most importantly, depending on the policy type you can add certain waivers to secure yourself against critical illness expenses or a disability that might stop you from earning money for a period of time.
Since most insurance companies still reply on insurance agents, your agent will help you sign the forms, understand policy conditions as well as be your call-to person in case you have questions or would like to switch or cancel your policy.
If you are a young couple with a mortgage and kids, you should strongly consider term life insurance.
You can also opt for a renewable term-life insurance policy that is automatically renewed upon the expiry date of your coverage term. However, you should keep in mind that your premiums will be increased each time your insurance term begins.
As an alternative, convertible term life policy. This gives you an opportunity to switch to a permanent life insurance policy without providing proof of your health, which is especially beneficial in case you have a serious ailment.
You can purchase term life insurance as an initial step before purchasing whole life or universal life insurance. Term Life Insurance includes:
– Temporary life insurance coverage
– Designed to cover specific needs for a period of time i.e. 5, 10, 15, 20, 30 years.
– Each time you renew, the premiums go up
– Less expensive in the beginning, but becomes very expensive later in life
– Expires at age ~85
– No cash value
– Convertible to permanent insurance
Policyholders can use their policy dividends to purchase additional life insurance or cover their premiums.
You can modify your basic policy with a flexible choice of riders. Whole Life Insurance includes:
– Coverage that will last you your whole life
– Premiums which stay the same and never go up
– Guaranteed cash values
– Can pay annual dividends
– Premiums are flexible based on your choice
In addition to providing security and protection through its life insurance component, Universal Life Insurance can provide an additional source of income for emergencies, retirement or estate planning needs.
You can select the investment vehicles yourself based on your level of knowledge, risk tolerance and circumstances.
You can customize your coverage to meet your lifestyle and budget needs. Universal Life Insurance includes:
– Flexibility in premium payments as well as death benefit
– A savings component as well as permanent coverage
– Tax sheltered investment growth
– Funds which can provide a tax-free pension fund
Most commonly, reasons for coverage denial include a history of serious illnesses or terminal sickness, age of the applicant and even convictions involving impaired driving.
However, the above mostly applies to term life insurance policies so you can also apply for a guaranteed Life coverage. You can contact our Insurance Advisors to learn more.
Critical Illness and Disability insurance coverage are typically the first go-to insurance coverage options. Both of them offer payouts in case you are either diagnosed with one or more covered sicknesses or become disabled and unable to continue earning.
Another option that not many people know about is Accidental Death coverage that offers additional premium paid out in case death of the insured person is a result of an accident as opposed to death from natural causes or illness.
More specifically, they review your health status, age at the time you apply for insurance as well as your smoking status. Consequently, for young and healthy non-smoker individuals insurance premiums will be considerably cheaper compared to an older adult with a medical history, who used tobacco products within a few years before applying.
Similarly, if you have a home with a mortgage, in case of passing, the payout amount can be used towards paying it off.
Depending on the level of your income, age (years left before retirement) and health status in addition to general costs of taking care of your loved ones, amount of mortgage and the length of its term you can calculate an approximate amount of money that should be enough to cover it all.
For example, for a married 40 y.o. person with 1 child earning $85,000 a year and $400,000 worth of mortgage for 30 years, something around 1 to 1.5 million dollars should be sufficient amount of money to cover most if not all possible expenses this person’s dependents will face after his/her passing. It would include paying off mortgage, supporting a child up to the age of 19 and possible paying most of tuition costs as well as it would replace the source of income for several years.
In case you leave your job where your life insurance coverage was tied to, you will loose it. Hence, it is important to have your personal life insurance coverage in case you decide that you are better off switching jobs or take a leave for an extended period of time.