Term Insurance – What All Canadians Need To Know
Canadians are truly some of the happiest people in the whole world. Unfortunately, they will run into heartache at some point in their lives. In order to prevent your children and spouse from losing it all, it is essential to protect them with some type of life insurance policy. Depending on your specific situation, term insurance Canada may be suitable. Within this guide, you will discover all about term life insurance, so you can determine whether or not it is right for you and your family.
How Term Life Insurance Works
If you are interested in acquiring a term policy, it is imperative that you fully understand how it works. You are in luck, because the terms are quite a bit easier to understand than most types of life insurance policies. The basic principal of the policy is that you pay a premium for a certain period of time and if during that time you die, the insurance proceeds will be paid out to your beneficiary or beneficiaries.
This type of insurance only provides coverage up to a certain age then it ceases. The amount of coverage will remain the same, as long as the person with the policy does not decrease the coverage. If you do not die during the time period, that the policy is active you should know that you could renew the policy. However, renewing the policy will cause the premium cost to increase. You should also be aware of the fact that more than one person can be insured under the same policy.
First and foremost, you should understand that term life insurance is slightly different from whole life insurance. While whole life is designed to protect the consumer from the duration of his or her natural life, term life comes with some limitations. It will protect the client for a specific period of time and can be renewed, once the duration has concluded. Plans generally extend over a period of 5, 10, or even 20 years. During this time, there will not be a need to provide proof of health.
The Main Advantage of Term Insurance
Although term life insurance might not be suitable for every Canadian, it will prove to be absolutely perfect for some. This specific type of insurance is generally well suited for those that wish to save money. It will give the consumer the ability to get covered immediately, without spending excessively. With this in mind, this type of coverage may be suitable for a young couple with children and a mortgage. It’ll provide them with the protection they deserve, without putting them into crippling debt.
What Factors Affect Premium Costs
The premium cost for each individual can vary and there are certain factors that will affect the cost. For instance, age, sex, and smoking status can affect the cost of your premium. You will also have to undergo a health and lifestyle assessment, which will also affect the total cost of your premium. It is also imperative you be aware of the fact that after a certain amount of time your risk classification can be reviewed and you might be required to complete another health and lifestyle assessment.
Another thing to remember is that life insurance premiums can sometimes fluctuate throughout their lifespan. At some point in the future, your insurance premium may increase, due to changes in your health or economical changes. However, it is sometimes possible to enter into a term life policy, which will allow you to maintain the price of your premium for a certain number of years. Depending on the specifics of your policy, the premium may remain the same for a period of 10 or 20 years. And, it is sometime possible to acquire guaranteed premiums upon each renewal of your insurance.
Multi-Purpose term life
When signing up for a term life coverage policy, you will want to make sure you will be able to utilize the money in any way you see fit. Your family will need the money upon your death, so it should be used for multiple purposes. Below, you will discover a list of ways your family will be able to utilize the money should you pass away.
- Establish an estate
- Pay off their house mortgage
- Make tax payments
- Pay off business or personal loans
- Use for the money for buy-sell agreements
- Covers funeral expenses
When it comes down to it, your policy can be used as you family sees fit. This is incredibly important, since things can change over the course of your life.
Flexibility of term insurance Canada
Again, term life insurance might not be suitable for all Canadians. At some point in the future, you may decide that you would prefer to upgrade to more coverage. The good news is that you can easily upgrade your policy. You will always maintain the ability to convert to a whole life or permanent life insurance policy at any point. When you’re ready to make the move, you should simply consult with your insurance broker.
Who Should Get It?
When it comes down to it, all Canadians should acquire some type of life insurance policy at some point in their life! Even if you do not have children, it is highly likely that your family or someone else depends on you and you will not want to leave these individuals in a detrimental situation. Of course, term life is a little different and is only suitable for certain situations. It is best for younger individuals, who wish to dedicate more money to other expenses. It can also be used by those in their 60s that want coverage for the short term. Nonetheless, whether you opt for term or permanent, life insurance is a necessity for all Canadians.
Applying for term insurance Is Quick And Simple
Many people are turned off by lengthy medical physicals and insurance applications, which is why they often go uninsured. You will be happy to discover that term life insurance does not require the applicant to undergo any type of medical exam. In fact, you can apply for coverage online, without stepping one foot into a medical clinic. Many companies offer this coverage to their employees, so if anything happens to them, their loved ones will be taken care of financially. Many beneficiaries opt to utilize the lump sum payout to pay off mortgages and finance postsecondary education for their children.
All applicants must complete a questionnaire regarding their medical and health history. This document will need to be submitted, along with the life insurance application, but most everyone is approved. Since getting covered is so easy, it is essential that you begin the first steps today!