Life Insurance Coverage For Canadian Residents

Life Insurance is a great way of investing a part of your capital in your loved ones’ future! Find a plan that suits your personal needs to leave a legacy of love for your family!
Life Insurance Coverage:
Did you know that having Life Insurance is a great way of investing part of your capital in your family’s future?

Here are some reasons to consider getting a Life Insurance policy:

What is Life Insurance?

In a nutshell, Life Insurance represents a contract between an insurance company and a policy holder, where the insurer pays an agreed sum of money upon insured’s death.

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!

What are the benefits of Life Insurance?

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.

How to Choose Life Insurance Policy?
Did you know that not all Life Insurance policies work the same way? Selecting the type of Life Insurance is no easy task and you may need some guidance from an experienced financial advisor. However, you can learn the basic difference between the types of available coverage on your own. Check out these Insurance tabs for a coverage type that suits you.
To buy or not to buy Life Insurance?
Typically, Life Insurance is designed for people who have financially dependent family members including children, spouse as well as aging parents.

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.

Select a Plan
Once you’ve determined what kind of Life Insurance you’d like to go with, it is time to delve into plan selection. Since there are lots of options, especially if you are young and healthy, you mind find yourself overwhelmed. However, in order to figure out what insurance is the right fit for you, you should consider your financial obligations and that of your family.

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.

Review Your Coverage
Once you’ve selected an option you feel comfortable with, it is important to review the fine print as well as optional coverage in that policy before you sign up.

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.

The final step is application and payment. Many insurance companies will also require you to go through standard medical tests before you can complete your application. Once your results are evaluated and final premium set, you can close the deal and start making payments for your insurance.

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.

How does Life Insurance work?
There are several types of insurance plans available on the market: Term, Whole Life and Universal Life. Check out these Insurance tabs for a coverage type that suits you.
Term Life Insurance:

Term life insurance is an affordable way to guarantee a short term protection for 10, 20 or 30 years, as an example. Such policies generally work as an income source replacement in case of death.

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

Whole Life Insurance:

As opposed to Term life insurance, Whole life insurance combines permanent life insurance protection with a savings component, but at a higher premium. You can keep your life protection provided you keep making premium payments.

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

Universal Life Insurance:

Universal Life Insurance provides permanent life insurance protection with an investment component. You can use the cash accumulated to cover the cost of your insurance premiums.

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

Frequently Asked Questions
Still not sure what to do? Here is a list of our FAQ’s; click the question to unveil the answer
Q: Can I be denied Life Insurance?
A: Each insurance company in Canada has its own eligibility requirements and risk assessment guidelines when determining whether an applicant qualifies for a certain Life Insurance policy.
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.

Q: What coverage is a worth to have along with Life Insurance?
A: While Life Insurance gives you a guaranteed payout upon insured’s demise, there are a few more coverage options worth considering that can save you money should a serious emergency occur.

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.

Q: How is Life Insurance insurance premium calculated?
A: In order to set a premium you will need to pay for your insurance coverage, insurance companies must assess the risk of you passing away during the coverage period. There are a few factors at play that insurers consider before making their decision.

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.

Q: Is it possible to use Life Insurance for business or mortgage?
A: Yes. While it is less common to use Life Insurance as a means to cover business expenses after one’s passing, it is still possible to name a business partner your beneficiary.

Similarly, if you have a home with a mortgage, in case of passing, the payout amount can be used towards paying it off.

Q: How to decide what amount of coverage to sign up for?
A: Most commonly, getting a life insurance comes to mind when you have a family to provide for and/or mortgage to pay 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.

Q: What if I have Life Insurance through work?
A: Many employers offer Life Insurance coverage as a part of health benefits you get when you work there. However, a popular misconceptions about such coverage is that a person who decides to change jobs will still be covered under such policy, which is not necessarily true.

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.

Contact us to get a quote for Life Insurance today!
I was struggling to find a good life insurance policy that would offer substantial payout at an affordable premium, but agents at Arbetov were able to narrow down the scope of options and help decide on the coverage amount I needed. Since I work in construction most of the time and being a family man, I felt like I needed that extra layer of protection for my kids and wife if something would happen to me. So big props to you guys for your continued support over the last 6 months that I was going through the process of choosing the right product!
Larry O.
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