Shopping for life insurance can be one of the biggest headaches anyone can encounter. Getting quotes can require speaking to multiple agents, answering very personal questions, and even getting a medical examination. How can you cut through all the tape and find the right life insurance for your needs?
When you understand all the terms and determine what matters most, you can make shopping for life insurance a simple and easy process. Here’s everything you need to know about life insurance, as you shop for policies with the best life insurance companies in Canada.
What is life insurance?
As the name implies, life insurance is a long-term policy that can pay out money at the end of the insured’s life. How much the policy pays out and when is all determined by the type of policy you select.
A term life insurance policy usually covers a person’s untimely death or accidental dismemberment for a period of time – usually 30 years or less. If the insured person loses their life or limb during the term for a covered reason, the insurance policy will pay the benefit. Because it covers you for a set period of time and under certain circumstances, term life insurance is usually cheaper for younger people, and gets more expensive as you get older.
Whole life insurance is a combination of both term life insurance and an investment product. While whole life insurance policies will pay out benefits in the event of an untimely death, it also accumulates a cash value over time. As the policy grows, the insured individual can borrow against the balance or start withdrawing money out of it as they get older. And at the end of their life, the remainder of the balance can get paid to a beneficiary of their choice.
What kind of life insurance is best?
As with all insurance products, not all policies are built the same. Everyone’s needs may be different – which is why it’s important to determine what you value most from life insurance.
Most people choose term life insurance for the lower price, and as a means to protect a major investment. For those who are worried about leaving loved ones with lost income and a large bill, like a mortgage or other debt, term life insurance can help cover the financial gap that would come with a sudden loss. On the downside, the insurance plan only provides benefits for the life of the policy. Once the term ends, the insurance drops.
On the contrary, whole life insurance provides long-term coverage that users can draw from as they grow older. In addition, this kind of policy provides a legacy by paying out benefits to the people of their choice. The biggest downside is the price: Whole life insurance comes with a higher monthly premium, and can’t offer a benefit payout until you have paid the premium for a set amount of time.
How can I find the best life insurance for my situation?
Before you start shopping for life insurance, its important to determine your reasons why you are looking for quotes in the first place. As you start looking, be sure you have the answer to these key questions:
Do I need my life insurance to pay off a major expense, or do I want to leave an inheritance for my family?
How much money would my family need in the event of my untimely death?
Am I looking for my insurance policy to double as a retirement plan?
Through understanding your true needs, you can narrow down which kind of insurance will be best for you, your family, and your budget.
The top five best life insurance companies in Canada
With your options in front of you, and your reasons why determined, you can start shopping with the best life insurance companies in Canada. As you start narrowing down your decision, we recommend you start shopping with these top companies.
One of the leading insurers across Canada, Manulife offers both term and whole life insurance, as well as a combination plan called Manulife Synergy. If you lose the ability to work because of a serious illness, injury or death, their combination insurance offers income replacement, coverage to pay off debts, and can even bridge gaps from your employer’s life insurance policies.
Part of the Great-West Lifeco insurance companies, Canada Life offers the flexibility you need for what you want to protect. No matter where you are in life, Canada Life helps you determine how much coverage under which plan you may benefit from most, giving you an advantage based on your lifestyle, not the company’s gain.
One of the biggest and most trusted names in finance worldwide, Sun Life offers multiple types of life insurance plans based on your financial goals. Through smart research, Sun Life can provide the right options for your family: term life, permanent life, participating life, and universal life.
IA Financial Group is one of Canada’s top insurance companies based on both size and customer satisfaction. With four different types of life insurance options – term life, permanent life, participating life, and universal life – their diverse options can help you get the most out of your investment and protect your family in the worst of times.
RBC doesn’t just offer banking products – they are also one of the largest insurance companies across all the provinces. They offer four different products for every budget and financial goals, including a personal accident plan that covers fatal accidents. The flexibility in budgets and goals gives you the freedom to choose what’s right for you.
Through understanding the ins and outs of life insurance, you can rest assured that your family will be taken care of during the worst of times. When you start your search with the best life insurance companies in Canada, you will get the most options that will help you reach your goals.