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Life Insurance - Resources

What is life insurance & why it is important?

Life insurance is a financial tool that protects the financial futures of the people who matter most to you. A life insurance plan provides your selected beneficiaries with a tax-free monetary benefit when you pass away. Your beneficiaries can use the plan’s benefit in any way they choose. For example, they can use the benefit to cover any outstanding debts, pay for children’s education, pay for daily expenses, and more.

What are the different types of life insurance?

There are typically two different life insurance plans: term life insurance plans and permanent life insurance plans.

Term life insurance only lasts for a selected period, typically 10, 20, or 30 years. However, once the term ends, so does the coverage, making this coverage option ideal for shorter-term debts and financial goals like mortgages or ensuring children’s access to education into adulthood.

Permanent life insurance, as the name implies, lasts for the entirety of your life. This type of life insurance is best suited to providing a legacy after you pass away, covering final expenses and estate planning.

There are also no medical and simplified life insurance options. These plans will not require medical exams or health questionnaires to apply for coverage. No medical or simplified plans are ideal for people who have been denied coverage in the past due to health issues.

Which life insurance plan is right for me?

Unfortunately, there is no one-size-fits-all life insurance product. Deciding on the right life insurance plan for you depends on your current financial obligations and your plans for the future. For example, a particular plan may make more sense for a younger couple just starting out in life than a person with grandchildren who just retired. Take a look at all the options available to you and see what each plan offers and how it can help you in your current life situation.

What factors will affect my rate?

Life insurance rates are typically affected by the amount of coverage, age, sex at birth, smoking status, current health, and family health history. However, for certain life insurance plans, some of these may not matter. For example, if you are applying for a plan that doesn’t require medical exams or health questions, your current health status will not affect your rates or eligibility.

Information on choosing a beneficiary

Choosing a beneficiary is a personal decision that will take some thought and consideration. If you are unsure who to pick, it helps to keep the reason you are buying life insurance in mind. This will help guide you to finalizing your decision. For example, are you looking to provide for your family after you’re gone? Then maybe your spouse is the best option for your beneficiary.

If your desired beneficiary is under the age of 18, a trustee must then be appointed to manage the benefit until the beneficiary is a legal adult.

You also have the option of designating a charity as the beneficiary of your plan. The charity of your choice would receive your plan’s benefit tax-free when you pass away.

Life insurance & taxes

Your life insurance plan’s death benefit is entirely tax-free, which means that when you pass away, your beneficiaries will get the total benefit amount without having to pay any income taxes.

When can a life insurance claim be denied?

When your loved ones make a claim after you pass away, the insurance company may not always pay out the plan. The insurer can deny it in certain instances. Some plans have what’s called a “2-year waiting period,” which refers to the period where the policy will not pay out if you pass away. Instead, a refund of premiums is paid back to the beneficiary if you pass away within the first two years. Suicide and material omission (when you willingly misrepresent some information about yourself when applying for coverage) are the other two common instances when a claim can be denied.

What happens at the end of a life insurance policy?

Permanent life policies don’t have an end date as they are in place until you pass away, or you cancel the policy yourself. On the other hand, with term life insurance plans, once the selected term length ends and no claim has been made, you have a couple of options. You can choose to renew your coverage at adjusted rates for another term, or you can convert your term policy into a permanent life insurance plan. Our Final Expense Plan provides coverage till age 100.

Life insurance & COVID-19

COVID-19 has changed the way Canadians and people around the world live. This unforeseen change has forced life insurance companies to make adjustments to their plans concerning COVID-19. With Specialty Life Insurance, this is no different. Our plans provide full coverage if death occurs as a result of COVID-19.

Can I get life insurance with a pre-existing condition?

You can get life insurance with a pre-existing condition. If you are applying for a no medical or simplified life insurance plan, your health has no effect on your eligibility for coverage. Our plans do not require you to undergo a medical exam or health questions when you apply, making it easy for anyone with a pre-existing condition to get life insurance coverage.

Can life insurance replace mortgage insurance?

A life insurance plan can replace a mortgage insurance policy. With life insurance, you can name a spouse, child or another family member as your beneficiary. Then, suppose something happens to you while the plan is in effect. In that case, your beneficiaries can choose to use the plan’s benefit in any way they prefer, including paying off any remaining mortgage balance.

A life insurance plan will always provide you with level coverage and remain in force even after you pay off your mortgage or switch lenders. But with mortgage insurance, you’re paying a fixed rate for coverage that’s consistently decreasing in value as you pay off your mortgage. Also, if you decide to switch lenders during your mortgage’s lifetime, your coverage will end, and you’ll be forced to purchase a new plan.