Financial security for loved ones is the dream of every Canadian. The uncertainty of life demands that you put in place measures to ensure the people you treasure the most do not suffer after your passing. Here’s one of the most practical ways to make this dream a reality and secure your family’s future by buying life insurance.
What Life Insurance Is and Why You Might Need It
Life insurance is a contractual agreement between a policyholder and an insurer stating that, in return for a payment, the insurer would pay a certain amount of money upon the demise of the insured party or after a specific amount of time.
It provides financial security for your family, covers your funeral expense, gifts an organization in alignment with a cause you are passionate about, or pay off debts.
Who Can Get One
The availability of insurance for life is open to everyone, including foreigners. However, permanent residents can qualify for higher insurance coverage than non-permanent residents. You can purchase Canadian life insurance coverage even though you’re not a permanent resident. Nevertheless, you will be required to provide a valid work permit, a valid student visa, or prove your refugee status.
Children can also get covered under a life insurance policy. But this has to be done by a parent or guardian, and in such cases, you must demonstrate an insurable interest in that person, which means you would financially suffer if they passed away.
What Does It Grant You Access To?
Life insurance coverage gives you and your loved ones access to multiple benefits. For your loved ones, the gift can come in a lump sum or monthly payments allowing them to offset funeral costs, pay the mortgage and other debts, and manage life’s expenses.
If you choose term life insurance, it can be a stable way of replacing your income to replace your current source of money. This helps you stay afloat and still keep the same living standards.
Types Of Life Insurance Are Available and What They Cover
Most people are familiar with the permanent life insurance given to your survivors after your demise. However, there are several types of life insurance, which are:
Term life insurance
Term life insurance is a policy that only lasts for a predetermined amount of time, usually between 10 – 30 years or until a certain age. You pay premiums until the term is through. If you pass away while the term is still in effect, your beneficiaries receive a death benefit, which is tax-free.
Whole life insurance
As long as premium payments are consistent, the insured individual is protected for the length of their life. However, they must pay fixed amounts and specific dates to avoid penalties.
Universal life insurance
Universal life insurance is the same as whole life insurance. It covers the policyholder for their life period, but this cover gives the insured flexibility to choose the amounts to pay each month and the time without facing any consequences.
Variable life insurance
Aside from providing a lump sum cash to your family, this insurance policy also has a cash value and investment aspect. It allows you to benefit from stocks, bonds, and mutual funds, subject to the market’s performance.
Burial life insurance
As the name suggests, final expense or burial insurance is a kind of whole-life insurance plan to pay for your final expenses, including your funeral and burial.
Joint life insurance
Joint life insurance is a type of life policy that covers two persons but only provides one death benefit if one of the two passes away.
Mortgage life insurance
When you buy mortgage life insurance, your loved ones expect to receive some money to pay off a mortgage if you, the mortgage borrower, pass away before your mortgage is fully repaid, lose your job, or become immobile after an accident.
Requirements And Documentation Needed
After choosing the perfect insurance company to work with, you must meet the following requirements before signing the contract to seal the agreement.
- Be at least 18 years (16 years in some provinces)
- Government-issued ID
- Proof of residence
- Bank statements
- Medical history
- Duly filled out Canada life insurance forms.
When, Where, And How to Get One and Calculating Your Insurance
Depending on the company you invest in, you can apply for a life insurance policy online, via mail, or in person. Find your options and use an online calculator to see what you’ll pay compared to your monthly income.
- Request the company to provide you with the application form
- Fill out the application form
- Complete the proposal form and key in the necessary details
- Visit your doctor for a medical examination before your approval
- Sign the forms and begin making the payments.
Thanks to technology, you do not have to visit the insurance company in-person to find out how much you should pay for your life insurance. Most insurance companies provide an online life insurance calculator to help you determine your premium payments about your salary.
You have to provide your age and income, choose a premium type and determine how much you want to receive after your policy to know how much you will pay each month.
You can contact your preferred Canada life insurance company to discuss more regarding your policy requirements using the contact information provided on the website. Here is a few examples of insurance companies in Canada:
Cost, Validity, And Processing Time
Depending on the type you want, it takes varying amounts of time to process life insurance policies. Other factors, such as health, can also slow the application process. The same applies to costs and validity. How much you pay and the validity of a premium depends on the policy variation you choose.
Insurance of life is becoming more popular among Canadians to ascertain that survivors don’t struggle financially after their death. If you’d like to take this approach, research reliable insurance companies and call the Canada life insurance number to get started on the journey to a financially secure future.