Buying Life Insurance: 10 Quick Tips From Chantal Marr

Posted on April 30, 2013 and updated June 12, 2017 in Insurance Types, Life Insurance Canada News, Term Insurance 6 min read
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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Pauline
Pauline

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

LSM Insurance
LSM Insurance

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.

Kole
Kole

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

LSM Insurance
LSM Insurance

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.

Kaylee
Kaylee

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

LSM Insurance
LSM Insurance

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

Kurt
Kurt

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.

LSM Insurance
LSM Insurance

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 https://lsminsurance.ca/canadian-life-insurance-companies may be helpful. The discount would be less than the annual payment discount.

Kent
Kent

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?

LSM Insurance
LSM Insurance

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.

WP Y
WP Y

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

LSM Insurance
LSM Insurance

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.

H. Harris
H. Harris

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

LSM Insurance
LSM Insurance

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 https://lsminsurance.ca/life-insurance-canada/2014/02/different-death-benefits… Read more »

LSM Insurance
LSM Insurance

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.

LSM Insurance
LSM Insurance

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

George
George

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

LSM Insurance
LSM Insurance

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.

LSM Insurance
LSM Insurance

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.”
http://www.squawkfox.com/2014/01/08/stop-over-thinking-your-money/

LSM Insurance
LSM Insurance

Thanks Oscar you may well qualify for a traditional policy at Standard rates. You can more details here https://lsminsurance.ca/life-insurance-canada/2010/01/alcoholism-insurance-underwriting-guidelines or give us a call 1-866-899-4849

LSM Insurance
LSM Insurance

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

LSM Insurance
LSM Insurance

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

Kurt
Kurt

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

Leo R
Leo R

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.

LSM Insurance
LSM Insurance

Thanks Leo you make a good point. Interest note on this http://stayathomemoms.about.com/od/moneymatters/a/lifeinsurancepolicyformoms.htm

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.

Henry
Henry

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

LSM Insurance
LSM Insurance

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

Ron Y
Ron Y

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

LSM Insurance
LSM Insurance

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.

Regina
Regina

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

LSM Insurance
LSM Insurance

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.

Patricia
Patricia

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.

LSM Insurance
LSM Insurance

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..

Yonis
Yonis

Good point on buying direct. These plans are usually very small death benefits and inferior poorly explained coverage

LSM Insurance
LSM Insurance

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.

Karen
Karen

How took over for Unity Life. I have a policy for my Mom and it was taken out a while ago. I can’t find a phone number. I’m So confused and frankly a little frsutrated the policy reads like a book on how to make paint dry

LSM Insurance
LSM Insurance

Sorry to hear about your frustration. Unity Life is now Foresters Life Insurance company and their phone number is 1-800-267-8777

Percy
Percy

I agree with the don’t buy direct. It’s not a better deal and on a different and my personal point. Direct carriers are not playing fair they say they are committed to the broker network and bring in new advisors and than they cannibalize the very segment they want to promote and protect. Total hypocrisy 🙁

LSM Insurance
LSM Insurance

Hi Percy, Many brokers share your view. Putting that aside like you I agree working with a broker gives the consumer the best value when buying life insurance.

Paris
Paris

How long does it take to oay out a life insurance claim. Unfortunately my father is very ill and I want to make sure my Mom is not left off guard. Thanks you for your time

LSM Insurance
LSM Insurance

Hi Paris, I’m sorry to hear this.

The amount of time in part depends depends on the size of the policy and how long since it was issued. Larger policies and policies under 2 years old generally take longer to settle as the insurance may have require an attending physician statement. This article may be helpful https://lsminsurance.ca/life-insurance-canada/2011/08/insurance-policy-claims-the-necessary-steps

Term Power
Term Power

Tip #1, 2 and 3 never buy Whole life insurance your jusy lining your agents pockets

LSM Insurance
LSM Insurance

Thanks for the note. But Whole Life insurance fits many needs. There is no supporting argument attached to your comment.

alex
alex

What should I be looking for when selecting an insurance broker?

LSM Insurance
LSM Insurance

Hi Alex,

Thanks for the note. Look for a broker that works with multiple carriers. is committed to the industry i.e. has taken industry related courses so they are to date on products and underwriting trends and is very reputable – ask for recommendations or to speak to existing clients.

Brad
Brad

how does the suicide out in a life insurance work. Can you really committ suicide and receive money?

LSM Insurance
LSM Insurance

Brad, I think you are referring to the suicide provision. Check with your policy document but is generally two years – meaning if the insured commits suicide within two years of the policy issue date the benefit will not be paid out.

Karot
Karot

Does Canada Protection Plan offer a Term 25 plan, if not not who else offers a no medical plan plan for my client. He wants it to cover a 25 year mortgage.

LSM Insurance
LSM Insurance

Thanks for the note. Canada Protection Plan does not offer a Term 15 plan. Assumption Life does offer a Term 15, Term 20 and Term 25 plan without a medical for applicants 18 to 65 $250,000 and less.

But the health questions are similar to what you would find on a regular app.

Rossland
Rossland

What eexactly does Guaranteed Renewable mean – do I have to renew my policy. The renewal premiums on plan are going up and I don’t want to pay but I dont think its fair I pay a penatly

LSM Insurance
LSM Insurance

Guaranteed Renewable means the insurance company has to renew tthe policy but you have the option to cancel the policy at any time with written notice.

J Feter
J Feter

Can I get a quote on a Joint Universal Life quote for me and my wife $300,000 she is 63 and I’m 61 both non smokers. Want it for estate planning and our cottage

LSM Insurance
LSM Insurance

Thanks for the note. The premiums will depend on the type of plan, some Universal Life plan are quick pay i.e. where they are paid up in a limited number of years. It sounds like you are looking for a last to die policy. We will send you an email to confirm more details. Thanks,

Ian
Ian

Can I still paying annually if I am paying my insurance premiums monthly for a few years. TY foir your help!

Syed Raza
Syed Raza

Hi Ian,

Great question! Yes most life insurance carriers will allow you to change your mode of premium payment from monthly to annually. Bear in mind though, some carriers will only allow the switch to occur once a year, on your policy anniversary date.

Hopefully that helps.

Regards,
Syed Raza

Temal Sukhu
Temal Sukhu

Why should i go to a brokerage company when i am being offered the policies directly from the insurance companies? Does it cost me more when i go through a brokerage company? What help other than the hassle of shopping around do i get from a broker?

LSM Insurance
LSM Insurance

Thanks Temal. There are a few benefits. 1) An insurance broker can review you actual need for insurance so you make sure you are getting the right amount of coverage and right plan – this is crucial. 2) A broker can help your beneficiary at that time of claim. 3) A broker usually can find you a better deal because direct carriers are only quoted their own captive in-house policies.

Lyle
Lyle

How much mire is Term Insurance than accidently insurance I’m looking at switching. I’m 46 and a non smoker

LSM Insurance
LSM Insurance

Thanks Lyle – individual life insurance provides much more comprehensive coverage than accidental coverage. The premiums will depend on the type of Term plan, the amount of coverage, your date of birth and smoking status. We will be in touch by email soon.

Prime
Prime

I think the use of a broker is overrated. Most of them try to see Whole Life and only use 1 or 2 companies. Who are you kidding?

Syed Raza
Syed Raza

Hi,

Thanks for the comment. Its always a good idea for consumers to do their own homework and check with their brokers to confirm how may carriers they represent. I agree that some brokers out there may only quote a few carriers which is not in the best interest of the client.

Our brokers will gladly produce a list of rates from dozens of carriers for the client to select from upon request.

The key is for the consumer to stay informed and to be aware of their various options.

Thanks again for your opinion!

Paul Lalonde
Paul Lalonde

Great article! Couldn’t agree more on all points. I wish everyone looking for insurance would read this first.
Paul

LSM Insurance
LSM Insurance

Thanks Paul. We are glad you found the article useful. I think there is a lot of useful points for consumers and brokers – looking into conversion options and renewal premiums is something a lot of people overlook.

William Shung
William Shung

Roy,
Every insurance company have more than one underwriter. The larger companies have a group of underwriters. Some are experienced professional underwriters; others have less experience. It is not a matter of which are the best insurance company for a heart attack. What you need is a good advisor (broker) who can handle your case well and submit the best information to the insurance company. I have had declined cases reassessed by the underwriter and eventually approved after providing strong medical reports. William Shung

Roy
Roy

Which are the best company for some with a heart attach, I’m 52 and otherwise in good health

William Shung
William Shung

The 10 quick tips in buying life insurance explained in this article are the basic considerations every potential buyer of life insurance should follow. Nevertheless, as seen from the 18 comments above, you will still have many questions. As an insurance broker I have come across many people who have bought life insurance without fully understanding what they bought. You should use your judgment to choose a professional broker who is there to help you and not to earn a quick buck!

Tamara Humphries
Tamara Humphries

Hi Phil

If the stents were over 3 years ago you would also qualify for an immediate benefit plan with Assumption Life. Your health would need to be stable for the past 2 years. Ask an advisor to check all the non-medical policies on your behalf

Tamara Humphries
Tamara Humphries

Hi Tonya
If you are in excellent/superior health and you are weaning yourself from nicorette you may be able to qualify as a preferred smoker. Some companies have a class for occasional smokers. The premium is more expensive than a non smoker but less costly than a full smoker is average health. Work with your advisor to help find the company who will get you the best rate.

Rebecca
Rebecca

How do I see my initial application to make sure the broke did not make any errors. Do I have to ask him for a copy?

LSM Insurance
LSM Insurance

There should be a copy of the application and any paramedical report inside your policy document usually towards the back of the policy. You could also request a copy from the insurance company.

Howard
Howard

referring to your point on renewable and convertible virtually every company offers this feature so how is it really a significant benefit?

LSM Insurance
LSM Insurance

Thanks Howard. You’re correct most companies offer these features. But the renewal premiums varies significantly from company to company as does the conversion option. Industrial Alliance has 6 policies to convert to whereas some companies have one plan.

Holly P
Holly P

Which insurance company is best for Term insurance.

My existing plan with …. is set to expire soon and I want to look at a new plan, I would prefere not to have to bother with a nurse again

LSM Insurance
LSM Insurance

Thanks Holly. Most Term policies require a medical of some sort. Assumption Life has a Term policy with face amounts up to $250,000 for applicants 18 to 65. But this plan still has a series of health questions.

Be sure not to cancel your existing plan until your policy is inforce if you decide to go this route.

Tonya J
Tonya J

I am looking for $300,000 to cover my mortgage.

I don;t smoke, but I chew Nicorette to help with my cravings, quitting wasn’t easy. Which if any company will give me nonsmoker smoker rates. The difference in cost based on your quoting calculator looks pretty big and I’m on a tight bufdget

LSM Insurance
LSM Insurance

Hi Tonya,

Thanks for the note. You would have to check how the question is worded but most carriers definitely ask about nicotine substitutes used in the last 12 months and unfortunately if answered “yes” you would be treated as a non smoker. You could always try for a Term 10 or possibly even a Yearly Renewable Term Universal Life policy that can be minimally funded and switch to something longer term once you qualify for non smoker rates.

James Richard
James Richard

How much coverage can I get without a medical. I had bypass surgery in 2010 and want to cover my line of credit or atleast as much of it as possible. Ty

LSM Insurance
LSM Insurance

If you are looking at a Simplified Issue policy – no medical tests and a series of health questions. The more questions you can answer “no” to the higher the amount of coverage.

You can combine coverage with multiple carriers to increase your coverage amount. We will send you a separate email now. Thanks

Emily
Emily

Can you give me an estimated monthly cost differential between a $500k term life policy with no medical exam vs. the monthly cost on the same policy WITH a medical exam?

LSM Insurance
LSM Insurance

Thanks for the note. Most No Medical Term policies would have much lower issue limits than $500,000.

The cost difference would depend on the type of No Medical Term plan generally speaking Simplified Issue plans – which have no medical tests but have health questions – which ask more questions change a lower the premium.

Phil
Phil

I’m 49 in Nov. i want life insurance but had a couple of stents put in 3 years ago. Do you have a reasonable plan no questions asked.

Syed Raza
Syed Raza

Hi Phil,

Thanks for the note. The Final Expenses plan offered by The Edge Benefits is a no-questions-asked plan with coverage limits up to $25,000. This plan is deferred for the first two years which means the death benefit is reduced to a return of premium is the insured dies within the first two policy years.

Hopefully that help out. Let us know if you would like to see a quote.

Thanks

June
June

How do I know if i will qualify for preferred rate what tests must I take.,

LSM Insurance
LSM Insurance

Hi June, In order to determine if you receive preferred rates you would have to submit an application. A broker could first submit a preliminary inquiry with the insurance company.

The tests that need to be completed depend on your age and the amount of coverage. A urine sample and blood test are two common tests.