How Canadians Can Save On Life Insurance Costs

We all know that buying a life insurance policy is important for planning the financial security of our family.  But many people postpone insurance because the premiums are considered expensive.

The problem is that when you postpone coverage, the more expensive it gets. Instead of waiting and taking risks, find out how you can lower life insurance costs to make them more affordable for you.

You need life insurance because you can’t predict the future

Of course we want to be there for our loved ones forever but we also know that’s just not possible.  We can work hard and provide everything they need now but what happens if the unthinkable happens?

There are only 2 certainties in life – death and taxes.  That truly underscores what we all know deep inside. We can plan the rest of our lives but plans can change, go awry, or not happen. For this reason, it is important to have life insurance in place NOW to secure our family’s finances.

We have made it easy for you to obtain a free life insurance quote so you can find an insurance product that suits your budget. One of our broker partners will help you in your search.

Factors That Lower or Increase Life Insurance Costs

Insurance premiums are calculated based on the type of insurance, the level of cover, and risks based on your age, medical conditions or health history, lifestyle (alcohol, smoking, occupation), and even your driving record.

Insurers take one look at your information to determine the risks and these factors have a big impact on the cost of your life insurance.

A 41-year old man who is healthy, doesn’t smoke and has a boring office job can obtain a term-life insurance cover for $500,000 for 10 years at a monthly premium of $31.  At the end of the 10 year term, cover can be renewed at a higher cost of $231.

Compare that to a 50-year old man, non-smoker, and has no medical conditions.  If he is to buy life insurance today, he can get the same cover for term life for about $72 a month.

Why does the same insurance cover cost differently for these 2 men?

Insurers use mortality tables based on risk factors in pricing insurance policies.  After medical evaluation at the time of application, they learn about your overall health condition.

The older you are, with more risks to your mortality, the higher your premiums.

Below are some factors that affect your insurance costs based on lifestyle.

Smoking

Smokers have premiums twice higher than non-smokers.  If you can stop smoking for the next 12 months, you can request for a reduction of your premiums from your insurance company.

Heavy drinking

People who consume around 4 drinks a day are considered excessive.  Premiums can be raised by 50% by insurers.  People who reduce or eliminate alcohol consumption for a year or more can benefit from reduction of insurance premiums.

Age

Standard life insurance costs are computed based on age.  If you apply at age 40, premiums will be higher than if you apply 2 of 5 years earlier.

Weight

Insurance companies also use Body Mass Index (BMI) to assess risk. A person is considered obese with a BMI of over 30.

If you are overweight, keep the weight off for one year and request for a recalculation of monthly premiums.  Reassessment will consider whether weight loss has improved blood pressure, blood sugar, or cholesterol.

Driving Record

Insurers charge higher premiums from individuals with poor driving records.  Convictions for offenses like drunk driving or speeding are considered by insurers and can affect the cost of your life insurance.  Maintain a good driving record to avoid increase in life insurance premiums.

You can save money from insurance premiums if you:

• Obtain life insurance as early as possible
• Maintain good health
• Avoid risky lifestyles (including extreme sports and vices)
• Have a good driving record

Other ways to lower insurance premiums:

1. Pay annual fees rather than monthly fees.

Another way to save money on life insurance premiums is to pay annually rather than monthly.  Insurers can give one month of premium savings to individuals who pay annually.

2. Backdate your insurance application.

People can also backdate insurance applications to lock in lower rates at an earlier age.  This means your premiums will backdate to a previous date (you’ll need to pay the lump-sum for the back-dated period) but you will be paying future premiums at a lower price.

3. Lower the face value of a term life insurance policy after a mortgage.

You may also want to reduce cover for the remaining term to reduce your insurance cost. You probably don’t need as much term insurance after you’ve reduced debts.

4. Shop around for insurance rates before renewing term life.

It is sometimes less expensive to obtain new cover than to renew an old policy.

These tips can all help you save on insurance costs.

More info on life insurance costs here…

How to choose your life insurance cover

Choosing life insurance coverage is not simple. There are so many different companies and various insurance products to choose from. It can be overwhelming but it can be simpler if you understand your financial goals and the insurance solutions that can help realize them.

Which is better – Permanent life or term life insurance?

Many consumers get confused with term life and permanent life insurance.  There is no quick answer because it depends on your personal situation and your needs.

A term life insurance is the simplest and easiest to understand.

• Cover is for a specific period such as 5, 10, 15, 20, or 30 years.
• You pay a monthly premium which is generally cheaper.
• Since cover is for a limited period, you will need to renew the policy or obtain new insurance at the end of the insured period.
• At the end of the term, renewal will cost more.

The most basic concept of term life is that it is insurance with a death benefit for a specified period. This means cash benefits are given to beneficiaries only if the insured individual dies during the term of the policy.

If the insured is alive at the end of the insured term, there is no cash value or return of premiums.

Permanent life insurance is designed to cover an individual for a lifetime.

• It accumulates cash value over time.
• It is more expensive than term life insurance.
• The insured also has flexibility in adjusting death benefit.
• Once sufficient value has been accumulated, an insured individual can also borrow funds against the policy.
• Some permanent life insurance products also have investment components that allow the insured to invest cash value in the stock market.

Permanent life insurance comes in 2 types – whole life or universal life.

The cost of a permanent life insurance policy can be 5 to 10 times the cost of term life insurance.

You can also choose no medical exam life insurance policies. You can get insurance cover without taking a medical check and be approved for life insurance. But keep in mind that this type of policy would be more expensive.

It is important to have the right type of insurance to meet your needs. Because you just don’t know what the future holds, you shouldn’t wait any longer and get the application process started now.

Choose between Term Life or Permanent Life Insurance

For most Canadians, term life insurance is sufficient but in some situations, permanent cover can also be useful.

When is term life insurance ideal?

• You need life insurance for income replacement over a certain period such as during a mortgage period or while children are young.
• You can’t afford expensive insurance
• You want simple insurance and prefer to have savings or investments separate

Term life can be converted to whole life insurance when the time ever comes that you prefer lifetime cover.

When is permanent life insurance ideal?

• You need lifetime cover
• You want to plan estate taxes
• In cases when an individual has a lifelong dependent such as a special needs child
• You want to be able to spend savings on retirement and still leave an inheritance to loved ones
• To make inheritances equal among heirs

It is important to shop around for life insurance. You can find term life cover at the right amount and for the right price online. It is also advisable to work with financial advisors if you are interested in obtaining permanent life insurance.

Benefits of Getting an Insurance Quote

When it comes to finding a life insurance quote, it is far more convenient and effective to use our free form.

• ✔ Shop life insurance in the comfort of your home
• ✔ No time pressure or obligation
• ✔ Absolutely free insurance quote

By requesting your free life insurance quote, you will receive help from one of our partners (that are all insurers and insurance brokers in Canada) for your term life insurance or permanent life insurance.  In this way, you can check out the benefits and overall cost of the premiums for your desired amount of cover.

Our insurance partner will be happy to provide you with an offer tailored to your needs.

Get your free quote and decide if it fits you.