For most new life insurance brokers and agents, selling life insurance is just a way of earning a living. However, all this changes when you see your client’s beneficiary get their death benefit check or when a person you were convincing to purchase life insurance passes away before making this decision. The difference in the outcome of the families in the two scenario gives passion and meaning to any life insurance Canada broker or agent. Any broker who has been at it for a while knows exactly these two outcomes and can give you endless examples for this.
Taking a life insurance Canada policy is a no brainer. In fact, taking the life insurance policy is as important as the livelihood that you are providing for your family today. It means that you are ensuring that their standard of living is maintained in future irrespective of what happens. For the average Canadian, giving a check of $150,000 to your family on your death will surely help to stabilize them financially and secure a level of quality financial future. A term life insurance from a life insurance Toronto company will cost you as low as $20 per month for a $150,000 death benefit for a 10 year term while a whole life insurance for a similar death benefit will cost you $200 a month for a life coverage with a life insurance Ontario company. This is pretty affordable to most Canadians today and the cost of insurance heavily outweighs the benefits reaped.
Options Available for Life Insurance
There are two types of life insurance Canada policies; permanent life insurance and term life insurance. Term life insurance provides life insurance coverage for a given duration. Most insurance companies provide term life for 10, 15 and 20 years with some providing a 30 year term life insurance. If the policyholder outlives the term of the life insurance, they may choose to renew the policy at much higher premiums without taking a medical. Most insurance companies will allow renewal until one is 80 years of age. They also provide an option to convert the term life insurance policy to whole life at any point but this attracts much higher premiums. Term life insurance is cheap in cost at the start compared to the other life insurance options. For example, a 40 year old non smoker male will pay life insurance rates for a 10 year term life policy of between $32 to $42 depending on the insurance company and other underwriting factors. Permanent life insurance will cost over $100 per month in most policy options.
Permanent life insurance policies come in two options. Whole life insurance policy provides level and set premiums for the whole life of the policyholder. The policy is straightforward with the death benefit and the premiums being determined at the beginning and remaining the same for the whole lifetime of the policyholder. The policy also accumulates a cash value that is equivalent to premiums paid and can be used to secure a loan from the insurance company or can be cashed on surrender of the policy.
Universal life insurance on the other hand is a permanent life insurance policy that combines insurance cover and tax deferred investments. The policy has two aspect; the cost of insurance and the investment or savings aspect. The premiums paid by the policyholder cover this two aspects of the insurance policy. The excess of the cost of insurance is placed in an investment account and it earns interest over time. The policyholder can adjust premiums at will as this affects the investment account. In case the policyholder chooses not to pay any premium in a given month, the cost of insurance is drawn from the investment account and therefore this will not affect the life policy.