At some point in their lives, almost every Canadian needs life insurance. However, most of us know very little about it. Life insurance is one of the most important investments an individual can make. Therefore it’s imperative that each of us has an understanding of the various types of life insurance, and ultimately why it’s so important for the majority of Canadians.
While the underlying principle of most life insurance plans are the same – a death benefit is paid if the insured dies while their policy is active – there are different coverage options which can be confusing. Not all life insurance plans are created equal, and what works for you and or family may not be right for your neighbour. Ask these 4 questions before purchasing life insurance to help determine which policy is best for you:
Why do I need life insurance?
If you’re researching life insurance, there’s probably a reason why you’ve decided that you need it. Do you want to protect your family financially should you suddenly pass on? Have you just taken on additional debt, like a mortgage, and want to ensure that your loved ones could continue living in the home in the event of your death? Would you like to leave a large donation to your favorite charity after you pass on? Your goals for your life insurance policy will help to determine the best plan for you.
What insurance options are available to me?
The average Canadian will usually have access to two types of life insurance policies: group, and individual. A group policy is one that’s generally offered through your employer, and sometimes deducted right from your paycheck. However, it’s often not enough to ensure a family can maintain their standard of living should the insured pass on. When researching life insurance plans, it’s a good idea to talk to your employer to understand if you’re covered under their policy, and for how much.
As the name implies, individual insurance is owned and applied for by an individual, not a company or large group. These policies ensure that a person retains coverage should they lose their job, or move to a company without a group insurance plan. The individual has control over how much insurance they choose, but may have to undergo a medical exam. If you have a fear of medical exams or needles, or have been turned down for life insurance before, there are still life insurance options available.
What happens if I’m alive when my policy expires?
Should you choose to enroll in a term life insurance policy, it’s important to understand what happens if you outlive the selected plan. Most people assume that the insurance simply expires, however that may not be the case. If you still require insurance and your term policy has ended, it’s likely that your new policy will have much higher premiums. Depending on your age and health, coverage could also be much harder to secure. It’s important to understand this before entering into a term life insurance policy so that you’re adequately prepared should you outlive your insurance coverage.
Is it possible to upgrade my policy if needed?
If you’re thinking of choosing a term life insurance policy, you’ll want to know whether or not you’re allowed to convert it into a whole life insurance policy should you need to do so. It’s important to be aware of any rules relating to the ability to convert your policy, such as whether you’re forced to enter a specific whole life insurance plan upon converting, or whether you’re able to choose from a few different options. You should also note whether or not there’s a time limitation on your ability to upgrade your policy, as some conversion privileges expire once the policyholder reaches a certain age.
Are you thinking about purchasing a life insurance policy? Contact us at 1-877-851-9090 today, for your no obligation quote. Canada Protection Plan is one of the nation’s leading suppliers of no medical life insurance.
