Most individuals don’t think much about life insurance. In fact, tell people you are a life insurance agent and chances are high that you’ll be left alone.

Despite many negative impressions people have about life insurance in general, it remains to be a very important financial planning tool that helps to protect your family’s future.


4 Simple Tips for Buying Life Insurance for Canadians

One of the reasons why people dislike buying life insurance is that they quickly get lost in all the jargon of riders, policy types, sub-clauses, etc.

The truth is that buying life insurance should be straightforward and simple if you have 4 clear tips to follow.

  1. Buy life insurance only for unlikely events.
  2. Obtain life insurance coverage that is just enough to sustain your standard of living.
  3. Don’t get coverage for events that won’t put you in the poorhouse.
  4. Buy life insurance that you can afford.

These 4 tips are easy to follow and to show you just how they can come in handy, here are a few examples.

Do you need to insure your children? Probably not, because while the loss of a child would be emotionally devastating, it would not be a financial burden.

Should you get whole life insurance or term life insurance? While whole life insurance offers more benefits and would be less expensive in the long run, can you afford it? If you can, you’d probably want to consider it.

Lastly, should you buy $500,000 life insurance or $1,0000,000? This is a tougher one and you will need to calculate how much your family would need in case something unexpected happens to you.


Basic Questions to Ask Yourself Before Buying Life Insurance

In many cases, people want to postpone buying life insurance because they are uncertain and don’t want to ponder on these hard questions.

These 3 questions are the most basic things you will need to ask yourself before you buy life insurance.


✓ Do I need life insurance?

Life insurance is a negative issue for many most probably because the need for it is associated with negative things like death, disability, sickness, etc.  People often forget that life insurance is designed to be protection for the unexpected.

The question whether you need life insurance is simple. If you are single, who will take care of your final expenses if something happens to you? Your parents, your partner? If you don’t want to burden someone with this, your life insurance can take care of it.

If you are in your forties, a breadwinner, and supporting a spouse and children, or have a mortgage, you really need life insurance. Think about what would happen to your family if you are suddenly no longer there to support them.


Life insurance is a gift for your loved ones

Your beneficiaries will receive it upon your death so that they won’t be burdened by any financial obligations or expenses and will have sufficient income to live comfortably.

There are also life insurance types that provide living benefits and cash surrender value. Whole life or universal life insurance are permanent life insurance that gives insurance coverage for a lifetime. Compared to term life insurance that has no cash value, permanent life insurance can help an individual build savings for retirement in addition to death benefits.


✓ How much life insurance do I need?

People buy life insurance to ensure the future of their dependents. It can be challenging to predict how much your family will need in the long term but you can calculate how much life insurance to buy. Use factors that have a direct impact on your family’s financial needs such as:

Your age

The younger you are, the lower the premiums. You can choose to buy term life insurance when you are young to provide insurance protection for 10 or 20 years.


The age of your children and your spouse

Their ages can help you determine how much income replacement and for how many years support they need.


Your income

Many financial advisers suggest obtaining 50% of your full income if you don’t have a lot of debt and have put aside savings for your children’s education.


Your debts including mortgage, car loan, credit cards

Include your mortgage, student loans, car loans, credit card and other debts when determining the amount of life insurance you need.


Future educational needs of your children

You should also consider educational expenses of your children for 4-year university programs.


Final expenses

Funeral expenses in Canada range from $5,000 to $15,000 while cremations could cost anywhere from $600 to $4,000, depending on accompanying services.

The general rule of thumb is to buy life insurance that will allow your loved ones to be financially secure in your absence.

When you have a ballpark figure, you can consider your personal circumstances to choose the right type of policy – term life or permanent life insurance.


✓ Do I get term life or permanent life insurance?

There are benefits to obtaining both types of life insurance but the right one depends on your personal circumstances.

You’ve probably heard that permanent life insurance is expensive and it is. Compared to term life, whole life or universal life insurance can be 3, 4, 5 times more expensive. But they provide lifetime coverage and can’t be taken away once issued.  They also offer cash surrender value and a tax free savings component, both of which can’t be found in term life insurance.


Choose the best Life Insurance you can afford

For many Canadians, however, term life insurance is sufficient. With this type of policy, you transfer the risk of your death within a specified period, say 10 or 20 years, and your dependents get a death benefit. Term Life is more affordable but premiums rise significantly if you renew at the end of your term.

In the end, your choice between term life or permanent life insurance will depend on which one you can afford.  The important thing is to have life insurance coverage in place now and not to risk your family’s future.


Where to get your Life Insurance –Direct or Insurance Agent?

When you are shopping for life insurance, you basically choose from 2 options. You can buy through an insurance agent or broker or direct from an insurance provider.  Each of these 2 options have pros and cons.


Buying Life Insurance from an Insurance Agent

When you buy from an insurance agent, you work with someone who may be from your area or you know directly.  You also get the chance to personally ask questions you may be shy to ask from an insurance company.


The Pros of using an insurance agent

  • ✓ Some agents are licensed to sell insurance products from multiple insurers. They can help you to find the best deal.
  • ✓ They can quickly check rates of dozens of insurance companies to get you the best rates and coverage
  • ✓ Agents are very knowledgeable about insurance and can give you advise about life insurance options.
  • ✓ Agents have good relationships with multiple insurers and know their specialties. If you have certain insurance risks due to lifestyle or health, your insurance agent can help you find the right insurer.


The Cons of using an insurance agent

  • ✓ Agents need to earn money and add on additional fees to insurance premiums. They are not significant but for the extra service you get for working with an agent.
  • ✓ Some agents are captive agents, meaning, they work for only one insurer.


Buying Life Insurance from Direct Insurers

You can buy direct from an insurance company over the phone or online.  If you want a quick and hassle-free insurance purchase, direct is a good option.  You can simply go online, get a quote, and complete an application.

The Pros of buying direct insurance

  • ✓ Quick and easy
  • ✓ Cheaper premiums
  • ✓ Offers no medical life insurance for individuals with health issues


The Cons of buying direct insurance

  • ✓ Limited assistance if you need a custom plan
  • ✓ Limited choice in products and coverage
  • ✓ If you get denied coverage, you have to repeat the application with a different insurer

There are many benefits to working with an insurance agent for your life insurance needs. Because you are purchasing a valuable commodity, you’ll have questions about cost, coverage, and benefits.  Your insurance agent will make sure to provide you with options that are tailored to your insurance needs and find the best insurance rates.

Of course you can buy a great life insurance policy directly from an insurance company but you’ll take on more responsibility for your choices.  When you buy direct insurance, you will need to educate yourself on your options because you won’t have the same opportunity to speak to an insurance expert.


Which method is better – Direct or with Insurance Agent?

There is really no right or wrong answer when it comes to where you buy life insurance. It all comes down to knowing your choices and your priorities.

It’s your family you want to protect so you must try to find the best protection you can afford. Start your search online with multiple life insurance quotes, compare your options, and speak with insurance brokers or agents with experience and a good reputation.

If you are in good health, by all means, go for health exams as they can help to lower your premiums.

The best way to determine which method works best for you is to Compare Insurances Online. Obtain free life insurance quotes so you can learn what your options are and choose the best coverage you can afford.


Get A Free Life Insurance Quote for all Types of Life Insurance

We know you are busy and want to get information about life insurance quickly and conveniently.

We have made this possible with our free form ont this page. One of our insurance partners (they are all insurance brokers and insurers) can help you obtain a quote for life insurance that meets your needs and your budget.

Best of all, this offer is no-obligation so there is no pressure to buy unless you are ready.

Advantages of using our free life insurance quotes

  • ✓ Fast and easy process
  • ✓ Free and no obligation
  • ✓ Available 24/7
  • ✓ Allows comparison of life insurance products across multiple providers

It’s high time to be in the driver seat when it comes to your insurance needs.

Fill-out our quick online form to receive your free life insurance quote.

If you want more details on how to choose your life insurance, read our complete insurance guide.

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