In this article, we will cover everything you need to know about life insurance in Canada for 2020. From the types of insurance to determining if you need life insurance (the quick answer is yes!). Nobody likes to think about the moment of their death, but life insurance is a gift you can give your family in case the worst happens.
Life insurance works by you making payments over the span of your life in exchange for a set amount of money when you pass away, which is called the death benefit. The life insurance covers the cost of your funeral, debts, tax bills and other financial burdens that you do not want to fall on your family’s shoulders when you are gone.
Key terms to know about life insurance:
There are two basic types of life insurance in Canada.
This type of life insurance covers you for life rather than for a specific term with locked-in premiums. However, this type is more expensive, perhaps about ten large pizzas per month instead of only one, but your beneficiary gets a guaranteed payout (unless you’re a vampire). Within permanent life insurance options, there are several subcategories:
Term life insurance will cover you for a specific number of years. As an example, if you opt for a 20-year policy and you die within that time, your family will get the death benefit. Most premiums will remain the same throughout the course of the term.
The cost of your premium is determined by your age and health. The approximate cost for a young and healthy individual looking for a $100,000 policy is equivalent to one large pizza per month. The older you are, the more expensive it is.
If you are looking to get started, there is an exclusive offer for 4 months of free premiums through Canada Life. A term policy can be converted to a permanent policy later if you prefer, usually without another medical exam.
To determine which type of insurance is best for you, here are the two considerations:
If you are looking for a personalized suggestion or more information on life insurance, feel free to contact me for a free consult.
About the Author:
Thomas C.Chan has been advising for over 10 years and has built a reputation for his approach in developing personal finance strategies, setting up risk management, and accumulating wealth for Canadians.
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