Canadian Term Life Insurance Options

Looking for term insurance? Here are some features and options available to you. The features and benefit options will vary according to each company's policies. We can help you choose the type, amount of coverage, and options to satisfy your needs and budget.

 

Be sure to read these other related articles that can help you save money:

 

Top 10 reasons not to purchase a 10-year term insurance plan.

 

Top 5 reasons to purchase a 10-year term insurance plan.

 

Should I buy term or permanent insurance?

 

I'm buying term insurance. Why should it matter what company I choose?

 

Should I be getting quotes from 10, 20 or more insurance companies?

 

 

 

Amount of benefit coverage

 

Depending on the policy you choose,

• minimum coverage can be as low as $10,000.
• maximum coverage is virtually unlimited.
• indexed face amount to help fight the effects of inflation.

Rate banding by amount of insurance

• band 1: $25,000 to $99,999
• band 2: $100,000 to $249,999
• band 3: $250,000 to $499,999
• band 4: $500,000 to $999,999
• more reduced rates for up to $50,000,000

Rates decrease at each higher band. If your insurance need is just below a band break, obtaining more coverage can actually save you more money.

 

Length of terms

 

Length of terms generally available are:

• 5 years
• 10 years
• 20 years
• Term to age 65
• Term-life (to age 100), no-cash value permanent plan.
• Term to permanent, a term plan that automatically converts to paid-up permanent insurance.

Some policies have guaranteed renewal rates, others do not. Make sure to ask, and read your illustration carefully (it should be mentioned there).

 

Underwriting categories

 

A broker/advisor cannot determine if you qualify for preferred rates. Each company has their own criteria for assessing your health risk. The preferred ratings can only be determined once underwriting is completed, that is, once they have completed all medical and/or investigative requirements. Also note that very few people qualify for "super-preferred" or the "absolute best" rates.

 

Until then, be prepared to pay for standard rates. The last thing you need to face is disappointment.

 

Companies use ratings similar to these:

• best-risk non-smokers
• better than standard risk non-smokers
• standard risk non-smokers
• users of tobacco or nicotine products other than cigarettes/marijuana
• cigarette/marijuana smokers
• higher (worst) ratings if your health is sub-standard. These ratings can vary greatly depending on your illness.
• declined or unnaceptable risk

The above is just a guide. Some policies only have standard smoking and non-smoking ratings. Be sure to ask for details if you feel you may qualify for better ratings.

 

Coverage types

 

Some companies will offer the following type of coverage:

• single-life
• combined coverage
• multi-life
• joint first-to-die
• joint last-to-die

Joint coverage is an excellent way to insure your mortgage or other jointly-held debt and is generally offered at a discount.

 

Renewable & Convertible

 

If you are considering keeping your policy in force for the long run, consider a plan with a guaranteed renewable option up to age 80 (that is, you can continue to renew your policy even if your health deteriorates). Also consider a plan that is convertible to age 75. Note that you must convert to a permanent policy that is carried by the company with whom you are insured at that time.

 

Additional options

• Return of all premiums paid upon expiry of policy
• Critical illness bundled coverage
• Total disability waiver
• Child protection
• Guaranteed insurability
• Accidental death & dismemberment

No extra charge options

 

These benefits are offered by some companies. Ask for details.

• Bereavement counselling assistance: reimbursement of counselling fees up to $1,000 after the death of any insured person in the plan.
• Compassionate assistance program - in cases of terminal illness, the policy owner may be able to obtain an advance payment of the death benefit in the form of a collateral loan.

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Participating Whole Life Insurance

 

 

 

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Universal Life Insurance

 

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