Discover affordable life insurance options for Canadians. Learn what to consider when choosing a policy and understand the importance of life insurance for financial security.
What is Life Insurance?
Life insurance is a contract between an insurance company and a policyholder, in which the insurance company agrees to pay a sum of money to the policyholder’s beneficiaries upon their death. The policyholder pays premiums to the insurance company in exchange for this coverage. Life insurance can provide financial security for a policyholder’s loved ones in the event of their death, helping to cover expenses such as funeral costs, outstanding debts, and mortgage payments. It can also be used to provide income replacement for a policyholder’s family or to fund a child’s education.1
There are different types of life insurance policies available, each with its own unique features and benefits. Some common types of life insurance policies include:
- Term life insurance: This type of policy provides coverage for a specific period of time, such as 10, 20, or 30 years. If the policyholder dies during the term, the beneficiaries receive the death benefit. If the policyholder outlives the term, the policy expires and there is no payout.
- Whole life insurance: This type of policy provides coverage for the policyholder’s entire life, as long as they continue to pay the premiums. The death benefit is paid out whenever the policyholder dies, regardless of when it occurs.
- Universal life insurance: This type of policy provides flexible coverage that can be customized to meet the policyholder’s needs. The policyholder can choose the amount of coverage, the premium payment schedule, and the death benefit.
How to Find Affordable Life Insurance in Canada
The cost of life insurance can vary depending on a number of factors, including the policyholder’s age, health, and lifestyle. However, there are a few things that Canadians can do to find affordable life insurance:
- Shop around: It is important to compare quotes from multiple insurance companies before purchasing a life insurance policy. The cost of coverage can vary significantly from one company to another.
- Consider a term life insurance policy: Term life insurance is typically more affordable than whole life insurance or universal life insurance. If you are on a budget, a term life insurance policy may be a good option for you.
- Get healthy: Maintaining a healthy lifestyle can help you to qualify for lower life insurance premiums. This includes eating a healthy diet, exercising regularly, and avoiding tobacco use.
- Consider a group life insurance policy: If you are employed, you may be able to get life insurance through your employer. Group life insurance policies are often more affordable than individual life insurance policies.
What to Look for in a Life Insurance Policy
When shopping for a life insurance policy, there are a few things you should keep in mind.2</sup. Some of these include:
- The amount of coverage: The amount of coverage you need will depend on your individual circumstances. Consider your income, debts, and family expenses to determine how much coverage you need.
- The policy term: The policy term is the length of time that the policy will be in effect. Choose a policy term that meets your needs. If you are not sure what policy term is right for you, talk to an insurance agent.
- The premium payments: The premium payments are the payments that you will make to the insurance company in exchange for coverage. Make sure that you can afford the premium payments before purchasing a policy.
- The riders: Riders are optional add-ons that can be added to a life insurance policy to provide additional coverage. Some common riders include accidental death and dismemberment coverage, disability income insurance, and long-term care insurance.
Learn More About Life Insurance
If you are interested in learning more about life insurance, there are a number of resources available to you. You can talk to an insurance agent, visit the website of an insurance company, or read articles and books about life insurance. The more you know about life insurance, the better equipped you will be to make an informed decision about purchasing a policy.