Buying Life Insurance: 10 Quick Tips From Chantal Marr
When buying life insurance in Canada, the following ten tips could save you and your family thousands of dollars and help ensure you get the best plan possible.
1. Pay for your policy annually if you can. Paying annually can save you thousands of dollars over the life of your policy. A 55-year-old non-smoker taking out $1 million in Term 20 coverage will pay $387 a month, or $92,880 a year. The same plan annually costs $4,300 a year, or $86,000 over 20 years — a savings of $6,880.
2. Use a broker. Life insurance brokers work with a variety of life insurance companies. It's important to use a broker who works with multiple carriers and not just one or two.
3. Make sure your term policy is renewable or convertible. This means you can renew your policy without a medical examination and convert to a permanent plan without one as well. The renewal premiums can fluctuate widely between companies so make sure you do a proper comparison.
4. Make sure your permanent policy is guaranteed. Many insurance companies are switching to adjustable whole life–style policies. Two companies who have introduced non Guaranteed Permanent policies are Industrial Alliance which has a level cost of insurance Universal Life plans where the cost of insurance can be adjusted and Empire Life has an adjustable Term 100 plan.
5. Don't buy direct. At first glance, buying direct seems like a good deal. But in many instances, buying direct from an insurance company can result in a substantially higher payment than buying through a broker.
6. If you're in very good health and have good family health history, look for a carrier that offers preferred rates. This could save you up to 35 per cent on your premiums. Compare the difference between preferred and standard rates for more details.
7. If you're in poor health, look for a company that offers Simplified Issue life insurance solutions. Simplified Issue policies are available without a medical examination and include a very short series of health questions. Many of these policies offer coverage on an immediate payout basis.
8. When you receive your policy, review it carefully, including the application. Verify that there are no discrepancies in the policy. Insurance companies give a 10 day free look period so take advantage of this to make sure you received what you wanted.
9. Use a Needs Analysis Calculator to determine your need.
10. If two spouses are applying together, consider a multi-life policy. This could save you between $50 to $100 a year on policy fees. You can find more details on multi-life versus joint-life policies here.
For more details on life insurance in Canada, please contact us at 1-866-899-4849 or visit our Term Life Insurance Quote Page.
UPDATE: I would like to thank all the following people for sharing their tips on buying life insurance on Twitter.