Whole life insurance in Canada:5 Essential Tips for Buyers

whole life insurance tips

Whole life insurance provides peace of mind by delivering permanent coverage at a guaranteed rate. However, there are many variables to examine before purchasing a whole life insurance policy. The following 5 tips can assist in the process.

  1. Whole life policies are generally much more expensive in nature and you want to make sure that you want coverage for life and that you’re able to afford the premium. If you cancel the policy in the early years, you’ll be losing the bulk of your contribution.

  2. Determine if you want a participating or non-participating policy. Participating whole life policies are generally higher in cost but provide an annual dividend which can translate into an increasing cash value and death benefit. This allows your policy to stay in line with inflation.

  3. Determine if the policy has a quick-pay option. Many whole life policies allow you the option of paying up the policy in 10, 15 or 20 years. You generally pay a higher premium for this option, since your premium period is condensed to a shorter time frame.

  4. Determine what riders or benefits are available as add-ons to the policy. Many whole life policies allow you to add a disability waiver, accidental benefit or a variety of other riders and/or benefits which can enhance the policy’s overall value. But be careful of the cost of these riders.

  5. Work with an independent broker who can provide you with unbiased independent advice and select the best whole life plan for your situation.

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  • LSM Insurance
    November 21, 2009 at 5:11 pm

    Hi Michelle,

    Thanks for the note – We offer Whole Life solutions from over 13 different carriers. I will send you a separate email with more details.

    Regards … Lorne

  • Michelle
    November 20, 2009 at 10:39 pm

    My fiancee is a non-smoking 56 yr. old man in good health (just had a physical with no problems at all). Is it possible to get whole life insurance for him on a small budget/income? We have a 4 yr. old son, so we would like some financial protection for the future. Thank you in advance.

    Michelle

  • LSM Insurance
    July 28, 2008 at 8:22 pm

    I think the other agent is giving you bad advice. Whole Life and Term insurance both serve unique needs.

    Whole Life insurance is designed for people who want insurance for life and Term insurance is for people who have a temporary insurance needs.

    Be very careful before cancelling your existing Whole Life insurance policy. The plan likely has very favourable rates since it was taken when you were younger. If you have an additional insurance need you can likely just add to your present plan. Also if you do switch plans make sure the other agent/broker completes a disclosure form comparing the two policies.

    Regards … Lorne

  • Jordan Smith
    July 28, 2008 at 7:56 pm

    I have heard Whole Life insurance is a rip off. One agent suggested I switch my Whole Life policy for a Term policy is this a good idea?

  • LSM Insurance
    April 6, 2008 at 3:30 pm

    We have also added an article to our website Whole life verus Universal Life Insurance.

  • admin
    April 6, 2008 at 3:22 pm

    Hello Charlotte,

    With a Whole Life policy you are paying a higher premium in intial years so you can have a level premium in the later policy years.

    Whole Life policies come in two forms; particiapting and non participating. Participating policies pay a dividend to the policyholder which flucuates with the companies performance. Non particpating policies are lower in cost, they do not pay a dividend. If you are concerned with guarantees take the non participating policy. All premiums, death benefit and pay periods are fully guaranteed.

    Whole Life policy have been sold in Canada for over 100 years and if they are bought from a reputable independent broker and company are in no way a scam. However, it’s crucial you discuss your situation with an independent broker who can fully analyze which type of life insurance is best for you.

    I hope this helps.

    Best wishes, Lorne

  • LSM Insurance
    March 31, 2008 at 1:36 pm

    With a Whole Life policy you are paying a higher premium in intial years so you can have a level premium in the later policy years.

    Whole Life policies come in two forms; particiapting and non participating. Participating policies pay a dividend to the policyholder which flucuates with the companies performance. Non particpating policies are lower in cost they do not pay a dividend. If you are concerned with guarantees take the non participating policy. All premiums, death benefit and pay periods are fully guaranteed.

    Whole Life policy have been sold in Canada for over 100 years and if they are bought from a reputable independent broker and company are in no way a scam. However, it’s crucial you discuss your situation with an independent broker who can fully analyze which type of life insurance is best for you.

    I hope this helps. Best Regards,

    Lorne Marr

  • LSM Insurance
    March 27, 2008 at 5:54 pm

    The reason Whole Life policies have a cash is because the cost is level for life. Therefore you are essentially overfunding your policy in the early years to keep your premiums level in the later years. You can cash out or borrow against the cash value in your policy

    Whole Life policies come in two formats participating and non particpating. The particpating plans pay a dividend which flucuates with the insurance companies performace. If you want a fully guaranteed policy go with a non participating policy. These policies allow you to choose your payment period and are 100% guaranteed.

    As for the policies being scam – I would strongly disagree – Whole Life plans have been offered for over a 100 years in Canada. It’s the brokers responsibility to sit down with the client and together with the client determine the best policy for their situation. That might be a Term policy or it might be a Whole Life policy or a combination of the two. I hope this helps!

    Regards,

    Lorne Marr

  • charlotte
    March 27, 2008 at 2:22 pm

    I am so concern about the whole life insurance, who pays the rest of the premium after you pay off the 10,15 or 20 years premium.
    And the policy says you have cash value, where is this money coming from.
    some brokers says this policy is a scam, and they company will always come back to you for more premium after the schedule time, if the invested money did not do well in the market, so the premium can not be paid for you. is this true, explan!
    Thanks

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