Buying Life Insurance: 10 Quick Tips From Chantal Marr

Chantal Marr
LSM President Chantal Marr
has some tips for
buying life insurance.

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 cost $518.40 per month, or $124,416 over the full 20 years. The same plan annually costs $5,760 a year, or $115,200 over 20 years — a savings of $9,216.

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.

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84 Comments

  1. LSM Insurance 11/02/2013 at 3:41 pm

    Hi Yonis, You make a few good points. Some direct plans offer a good value, but in the vast majority of instances the consumer can get a better buying life insurance from an independent broker.

  2. Patricia 11/07/2013 at 12:25 pm

    Do all companies give a discount for paying annually and is the discount the same with each company. Can I switch after I already staying paying I don’t want to pay annual and lose my coverage if things get tight.

  3. LSM Insurance 11/07/2013 at 12:29 pm

    Hi Patricia,

    All companies I am aware of give a discount for Whole Life, Term Life Insurance etc when paying annually versus monthly. The modal factor used differs from company to company. Most policies allow you to switch from Annual back to monthly – some may stipulate on the policy anniversary..

  4. Regina 11/14/2013 at 10:06 am

    Which company has the lowest 10 year term rates for a 45 year old female ns

  5. LSM Insurance 11/14/2013 at 11:21 am

    Thanks Regina. This will depend on your age nearest age and the amount of coverage you are looking for. Another variable would be if you qualified for preferred rates which are given to people in excellent health with very good family health history.

  6. Ron Y 11/26/2013 at 5:38 am

    How much more is a 30 year term than a 20 year term

  7. LSM Insurance 11/26/2013 at 11:38 am

    Depending on the age a little more than 50. An age nearest 40 year old male NS $500,000 Term 20 – $629 a year and $500,000 Term 30 $1085 a year.

  8. Henry 12/07/2013 at 1:29 pm

    It’s a good point about paying annually I frequently discuss this with my clients. There is a big savings to be had especially in today’s lowest interest environment

  9. LSM Insurance 12/07/2013 at 3:29 pm

    Thanks Henry. A lot of agents / brokers do not adequately explain this to their clients.

  10. Leo R 01/02/2014 at 10:26 am

    Stay-at-home Parents are very undeserved and under appreciated life insurance market. They can drivers, caregivers, teacher, and cook. While the need is more difficult to calculate it is still very much there.

  11. LSM Insurance 01/02/2014 at 1:38 pm

    Thanks Leo you make a good point. Interest note on this link to stayathomemoms.about.com

    In 2009, the same website released a report that says stay-at-home moms in the U.S. would earn $122,732 per year for their many job roles. SAHMs in Canada would earn $135,661 Canadian.

  12. Kurt 01/13/2014 at 5:29 am

    Can I still insure my wife even though she is not working. She is 36 and in good health, I have insurance already but I never insured her since I’m the only one generating an income

  13. LSM Insurance 01/13/2014 at 5:32 am

    Hi Kurt,

    Yes you can still insure your spouse. This is a mistake many people. When one spouse dies, the lifestyle of the surviving spouse can change drastically. Even if a parent doesn’t work outside the home, it would cost money to replace their childcare and other household duties.

    The surviving spouse may also need to take additional time of work so the remaining income coming in could be further reduced

  14. Oscar 01/31/2014 at 3:56 pm

    Can I get life insurance even if I’m an alcoholic. I have not drank in nearly 10 years

  15. LSM Insurance 01/31/2014 at 3:59 pm

    Thanks Oscar you may well qualify for a traditional policy at Standard rates. You can more details here link to lsminsurance.ca or give us a call 1-866-899-4849

  16. LSM Insurance 02/20/2014 at 4:25 pm

    Good quote from Preet Banerjee on the importance of disability Insurance “if you’re self-employed (like me) or you don’t have a solid benefits plan (like Carl), then Banerjee advises you to “run, don’t walk, to get a disability quote from an insurance agent.”
    link to squawkfox.com

  17. George 03/01/2014 at 7:36 pm

    Can I get a quick issue plan that pays out right away if my dad is in the hospital with cancer. We need something to cover burial

  18. LSM Insurance 03/01/2014 at 7:45 pm

    I’m very sorry to hear that George. Unfortunately your Dad would likely only be qualified for a Guaranteed Issue plan with a deferred death benefit.

  19. Rose 03/20/2014 at 8:54 am

    What are the savings for paying my life insurance annually. Is it different among different companies.

  20. LSM Insurance 03/20/2014 at 8:58 am

    Thanks Rose. Yes it’s different among different companies. An example is below. $500,000 Term 20 for a 40 year old female non smoker. $28.26 if you pay monthly this comes out to $339.12 a year. Over 20 years $6782.40. Paying annually is $314 a year $6280 over 20 years. A savings of $502.40 over 20 years.

  21. H. Harris 03/26/2014 at 6:30 am

    How does Humania policies compare with Canada Protection and can my client own both plans or is their a cap

  22. LSM Insurance 03/26/2014 at 8:29 am

    This is an interesting question. Here are some of the differences

    Canada Protection Plan

    Has Term 10, Term 20 and Term 100 and Whole Life Simplified Issue Plans
    Maximum Face amount on Term is $200,000 but you can have Term and Whole Life
    Deferred Term Policies have a 2 year period on non accidental deaths

    Humania Assurance
    Have Term 10 and Term 20 Policies no Permanent
    Maximum Issue is $300,000 – higher than most simplified issue term policies
    The Death benefit has a pre-existing condition exclusion which is different than a deferred death benefit. See this article for details link to lsminsurance.ca

    Yes you can have if coverages if the insured qualifies

  23. WP Y 03/28/2014 at 6:28 pm

    Can I have policies with 3 different companies. What are the rules regarding multiple life policies

  24. LSM Insurance 03/28/2014 at 6:41 pm

    Thanks for the note. Yes you can have multiple life insurance policies. Most insurance carriers usually cap life insurance amounts as 20 times your abut guidelines can vary from company to company.

  25. Kent 05/22/2014 at 2:39 pm

    Great tips. I want to get life insurance (I’ve already decided on which company) and I’m in good health, do I have to go through a broker or can I deal with the insurance company directly?

  26. LSM Insurance 05/22/2014 at 3:59 pm

    Good question Kent. You can buy life insurance direct through Manulife, BMO or RBC but their product offering is more limited and the premiums are generally more expensive than through a broker.

  27. Kurt 05/29/2014 at 8:03 am

    Can I pay for my life insurance semi annually do I still get the same discount is annually. Annually is too big a chunk for me.

  28. LSM Insurance 05/29/2014 at 8:34 am

    Hi Kurt, Some but not all companies have a semi annually payment option. You would have to check with the insurance company or your advisor. Our life insuranc directory link to lsminsurance.ca may be helpful. The discount would be less than the annual payment discount.

  29. Kaylee 07/07/2014 at 9:54 am

    I think the point made about getting coverage at a younger age, rather than when you need it – is missing the point of life insurance it is to replace lost income and protect you family it is not an investment. I think that’s where the confusion sets in

  30. LSM Insurance 07/07/2014 at 1:13 pm

    Thanks Kaylee, life insurance to maintain your families current standard of living is definitely the primary reason for life insurance but there are many other needs for Permanent life insurance including Estate Planning, Charitable Giving and To Leave Funds for Your Family even after your children are no longer dependents

  31. Kole 07/10/2014 at 6:58 pm

    How can I change the beneficiary on my ex-wife is the beneficiary on the plan and she passed away

  32. LSM Insurance 07/10/2014 at 7:51 pm

    Kole, normally the irrevocable needs to sign a form to have the beneficiary changed but if they passed away the insurance will need a copy of the death certificate or equivalent proof of death before the beneficiary can be changed.

  33. Pauline 07/19/2014 at 11:58 am

    I noticed the RBC no longer offers a 20 Pay policy – does this mean I can not add to my existing policy. My agent said I had a Guaranteed Issue Rider

  34. LSM Insurance 07/19/2014 at 12:44 pm

    Hi Pauline, You’re right this plan is no longer available. You would have to check with RBC and or your policy document but generally speaking Guaranteed Issue Riders only allow you to buy coverage available for issue at the time without a medical.

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