INSURANCE FOR LIFE
Insurance has become an important part of modern life. It is more so with Life Insurance. Life insurance is taken by us for different reasons. Its primary function is to protect income in case of an untimely death of the life insured. Unlike OHIP and Vehicle Insurance, Life Insurance is an optional Service. If it is optional, why should we need Life Insurance? Why do we need Lif
e Insurance? We all have financial responsibilities. We may have dependent children, mortgages and other financial commitments like loans, bill payments and final expenses. They can be met only with money. Further when we inevitably go to meet our maker, we may like to leave behind something for our loved ones. We may have properties, savings or other forms of wealth. They are all taxable. Insurance Benefits are the only income that is tax free. One could opt for an individual life insurance or a Joint policy linking two individuals. Joint first to Die or Joint last to Die policies are available. Depending on the need you could choose what is best suited for you. Individuals need to qualify medically, financially and legally to obtain insurance. It is not issued to all those who want insurance automatically. What kind of Insurance do I need and how much coverage? When there are so many types of plans available in the market offered by many companies, it is naturally confusing for an average person to make an informed decision. What is the plan best suited for you and how much coverage you require depend on a number of different factors. An insurance advisor will be able to do a need analysis based on your needs, objective and budget hence recommend suitable plans to you to choose from. What are the different types of plans available?
1). Term Life Insurance. These plans are like renting an insurance for a limited number of years. Traditionally there were 10 & 20 year term insurances. Now many companies are offering up to 40 year term plans depending the age of the customer. They are renewable and convertible up to a certain age. They are stripped down plans with no bells and whistles attached. For this reason they are inexpensive initially. Their prices increases when you renew it every time up to a certain age. Term insurance plans meet the need for coverage that span only limited period of time. Good examples are mortgages with amortization periods that can range from 20 to 25 years. Families with young children too can benefit by term plans that can cover the parents till the children are independent. Lending institutions often insist on term insurance coverage to cover their risk of exposures.
1). Permanent Life Insurance
As the name suggests these are plans that cover your entire life time. Some companies issue policies up to age 85 for qualified customers. When you buy your insurance at a young age you could take advantage of the low prices. Further at a younger age it is easy to qualify medically and you could opt to pay up the insurance in 10, 15 or 20 years. You have to be careful about these paid up insurance though. Some companies guarantee paid up period irrespective of interest rates. Others link paid up period to prevailing interest rates or investment options. With fluctuating or low interest rates and volatile market environment they could be unpredictable. Such paid up insurances accumulate cash and will have cash surrender values. There are also policies with high cash values and Universal Life insurance plans offer the added advantage of using it as a tax sheltered investment options. You could obtain a loan on paid up policies against their cash surrender values or surrender the policies and get the cash surrender values accumulated in the policy. So in Permanent Insurance Plans there are a wide range products to choose from. Some banks offer Insurance products. They are banks not insurance companies. Some may have an insurance subsidiary but when you choose to buy insurance from a bank you may not be dealing with an experienced or licenced Insurance advisor. Further the Bank will be able to offer only what the bank has not what is best for you. This is only a brief account Life Insurance in its simplest Form. Where can I get the policy best suited for me? An Independent and experienced Insurance Advisor will be able to compare and contrast the different products offered by various companies and offer you the choice. Shopping for the right Insurance is not an easy task given the number of insurance companies that offer Insurance Policies and the various types confusing products available in the market. An Advisor will be able to do shopping on your behalf and make your life that much easier. There are many companies that offer Insurance Products in Canada. Some are centuries old and others are relatively new. There are also large as well as smaller companies. They are all governed by COMPCORP hence they are all safe to deal with. Given below are some of the leading companies in Canada. Manulife Financial Corp The Excellence Life Insurance Equitable Life
Great West Lifeco Inc RBC Insurance Co Unity Life
Sun Life Financial Inc Trans America Life Co Foresters Insurance
Industrial Alliance Insurance The Standard Life Assurance Co Assumption Life
Desjardins Financial Security BMO Life Insurance Co La Capitale
Canada Life Insurance Co The Empire Life Insurance Co UL Mutual
It is certainly a challenging task to choose the right Insurance Provider among so many companies and then vade through available plans price structures and arrive at the product right for you. So let your Insurance Advisor do the heavy lifting for you. LIVING BENEFITS
Life Insurance Policies Pay benefits to the beneficiaries upon death of the Life Insured. There are also benefits available to the living. They are known as Living Benefits. If a person becomes disable as a result of an accident or sickness he or she will need financial assistance. Their income will be limited and the expenses will escalate. Living benefits are meant to take care of such situations. These plans are also available in different forms to suit the varying needs of customers.
