If you're Canadian, there's a good chance you don't have enough insurance. At least, that's what studies say. If you're not one of the 25% of Canadians that have term life insurance you're likely included in that underinsured group.
That doesn't mean term life insurance hasn't been on your mind, though. If you've been looking into getting insurance, you're on the right track.
Learning about life insurance is easy. Choosing the right policy for you can be trickier though. So to help you choose the best term life insurance policy for you, here are some helpful tips.
There's no one set amount you can get when you purchase a life insurance policy. You'll see many different amounts offered, depending on where you look.
You'll likely see a lot of big numbers. $100,000 and $250,000 are pretty common amounts.
Why are the numbers so high? Because you're looking to provide your beneficiaries with enough funds to pay for what you help take care of now.
Your home mortgage, school loans, and medical bills could be included in this amount.
Because of this, you should aim for a large amount. Consider how much coverage you'd need, and look for policies that offer that amount of coverage.
You might be tempted to go for the highest amount offered. Keep in mind that those policies will likely require medical examinations. And you'll have to pay more for them.
Don't settle for something that will make you underinsured. But don't pay for more than you need, either.
Life insurance is pretty inexpensive, in general. The costs do go up in certain situations though.
You'll have to pay more if you aren't physically healthy. You'll also have a higher premium if you wait to sign up until you're older.
Life insurance is more affordable when you're younger. Because of this, it's best to purchase your term life insurance policy earlier.
You know you need life insurance. So don't wait around. Start comparing your options and sign up for a policy sooner than later. You'll save money, and you'll get the peace of mind that life insurance offers sooner.
There are lots of life insurance companies to choose from. Some will be better than others. So you need to compare the companies themselves.
You can do this two different ways. Either find some policies you like then research the companies, or research companies first, then look into what they offer.
The insurance provider you go with should have a great claim settlement ratio. For example, a ratio of 97% means your beneficiaries are much more likely to get the money they claim than if the company's settlement ratio is only 50%.
Always make sure you're working with a great company. Get to know their claims settlement process and make sure it's effective. Read reviews to make sure real customers' experiences backup the ratios you've found.
Life insurance payout isn't cut and dried. Just like you have many policy options, there are different ways for your insurance funds to be paid out.
Many life insurance plans will pay out the funds you've paid for in one lump sum. That means your beneficiaries would receive all $250,000 (or your policy amount) at once if everything clears claims properly.
That might be the best option for your family. Then again, it might not be.
The payout can also happen in regular installments. This essentially provides an income for your family after you're gone.
In some cases, this money might be taxable. Choosing a policy where those funds are tax-free is the best option. So before going with this type of policy, always check on the tax status of the payout funds.
This option provides an ongoing source of money for your beneficiaries until your paid-for funds are used up.
Things won't always be free and clear for your beneficiaries when you pass. Your term life insurance provider likely has some exclusions that are part of your policy.
Always make sure you understand these exclusions!
This is something that should be done before you sign up for a policy. Otherwise, you may end up paying for a policy that doesn't make any sense for your life situation.
Say, for example, you're an industrial worker. What if your life insurance policy didn't pay out if you died in an industrial accident? That policy wouldn't make sense at all.
Exclusions are situations in which your beneficiaries' claim will not be paid. So make sure your policy makes sense.
You'll have to share a lot of personal information when you sign up for a life insurance policy. This isn't the time to hide things because you're embarrassed or otherwise being shy.
The information included in your policy has to be complete. Otherwise, when a beneficiary tries to make a claim, they may run into problems.
All information, such as your name, location, age, weight, and other health details must be accurate. So always provide truthful information.
Choosing the best term life insurance policy isn't always a walk in the park. But the time and effort it takes to find the best option are always worth it in the end.
You could go with the first policy option you're presented with. While that may work out alright, there's a good chance you'll find a better fit elsewhere.
So take the time to make the right decision. You and your family members will be glad you did.
Not sure if you need life insurance right now? Check out this article to see why you do.