Understanding Preferred vs. Standard Rates
Qualifying for preferred rates
can save you money.
Canadian life insurance companies have been offering preferred rates for well over ten years now, but there is still quite a bit of confusion among consumers. This is mainly because there are many variables that come into play when determining whether or not the insured qualifies for a preferred rate.
The following are many of the variables analyzed by insurance carriers:
Height and Weight
Family Health History
Hazardous Sports and Occupations
The difference between preferred and standard rates can be very significant, especially for term policies. A 40-year-old, male non-smoker would pay $53.06/month with RBC Insurance for standard rates on a $500,000 Term 20 policy. Equitable Life’s Term 20 plan would cost $47.46/month if the same applicant qualified for preferred rates.
Preferred Plus rates are the lowest rates offered by Canadian carriers. In the scenario above, the applicant would pay $41.40 per month with Canada Life at their Preferred Plus Rates.
Preferred rates have a much smaller variable on permanent policies. Permanent policies are plans where the premiums are guaranteed never to increase and offers the insured lifetime protection. Most insurance companies don’t even offer preferred rates on permanent plans. But, when they do, the margin is much smaller.
A 40-year-old, male non-smoker looking for $500,000 of permanent Term 100 coverage would pay $349.20/month at preferred rates with Industrial Alliance, whereas standard rates would cost him $354.15/month.
Please feel free to visit our Instant Quote Page to get a free instant term life insurance quote, or call us at 1-866-899-4849 for more details.