FAQ

Functionality You Will Love

Do I need life insurance?

Not necessarily. However, if someone you love is dependent on you financially, you need life insurance. If you have no children or dependents whom you support financially, you might not need a life insurance policy after all.

Life insurance aims to provide a solution for those who seek income replacement, mortgage protection, estate planning, leaving a legacy, or burial expenses. It’s all important.

How much does life insurance cost?

It depends. I need to know your age, gender, tobacco use, family medical history, and current health. Additionally, I need to know the requested face amount and policy type just as a starting point. This is the most common question. I hate to disappoint you, but I need to know the requested face amount and policy type just as a starting point.

Here is an average cost of insurance in Canada for a 20-year-term policy. A $500,000 death benefit is $49.54 for a 40-year-old male and $36.49 for a female of the same age, as of September 2022.

How much life insurance should I buy?

Very good question. Considering you insure things like your car, your home or any other asset you own; truly your life is priceless! Let’s start nevertheless by looking at your surviving family’s immediate, ongoing, and future financial obligations. All things considered you look at:

Immediate: funeral costs, medical bills, taxes.
Ongoing: mortgage payments, utilities, food.
Future: college tuition, retirement funds.

A simple Financial analysis to determine how much life insurance you need.

Where can I get life insurance quotes, can you give me a quote?

Many life insurance websites and his dog offer life insurance quotes online. However, since you, the client, may not know what plan is best for you based on your health history, you may find that you’ve applied to the wrong policy with the wrong company. Moreover, the quotes you see online aren’t the rates you will actually qualify for.

This is why you need to do research through a broker you want to work with rather than looking for the best rate. Choose the right broker, that’s the key to obtaining the best policy. Sounds like you need to contact us!!

How does the insurance company determine my premium?

Factors such as age, gender, height, weight, health status (including whether or not you use tobacco), and if you participate in high-risk activities or occupations. Premium rates are typically based on those factors.

Do I need to take an exam?

If you apply for a traditional policy, then yes, you will have to undertake the exam. However, there are a few companies who offer up to one million dollars of life insurance coverage without the need to go through an exam. Additionally, policies such as final expense are approved on a simplified issue basis, and do not require you to take the exam.

Why do I need to take an exam?

Would you buy a cat in a bag without checking it first? After all, insurers are on the hook for millions if you die soon after getting the policy. They increase their odds by conducting an exam and consequently decide how risky you are to insure. Additionally, they make sure not to insure the unqualified individuals who may have a terminal illness or otherwise are likely to die soon.

What do the insurance companies test for?

A third-party nurse will go over the questions you answered on the application and record your pulse, blood pressure levels, height and weight, and also take a blood sample. Sometimes, depending on your age and the company, a urine sample and EKG will also be required.

What is a term policy?

Term insurance plans cover you for a term of ten to more years, and it pays a death benefit only if you die in that term. However, even if you don’t die within the term, you have not wasted your money any more than when you buy car insurance but never have an accident.

You have bought yourself peace of mind that your beneficiaries will receive the death benefit if you should die within the term. Term policies typically offer the lowest monthly premium and are usually the best option if you have a limited budget or a temporary need. You can typically renew term policies for one or more terms even if your health has changed, however each time you do so; the premium may be higher.

What is a permanent policy?

Permanent policies are typically the best option if you are looking for life-long protection, or an option to accumulate a tax-deferred cash value. A portion of the premium of a permanent policy is used to build up a cash value. The cash value can be used in several different ways, including allowing you to take out a loan against the cash value, or paying your premium after your policy is fully paid up.

Once I buy the policy, will I even need to change my insurance coverage?

If you already have a policy, it will usually have a lower premium rate than a new policy you would buy. If you’re buying a permanent policy, the cash value will also be smaller for several years. Keeping all these factors in mind, it might be worth considering a new policy if you have any significant changes in your life circumstances, such as if you:

Are recently married or divorced
Have or adopt a child (or became a grandparent)
Have children or grandchildren who are about to enter college
Provide care or financial help to a child or elderly parent
Receive an inheritance
Retire (or your spouse retires)
Start a business
Change or lose your job or salary

What is the underwriting process?

The life insurance underwriting process is a method through which carriers assess your risk based on the medical exam (if needed), answers on the application, and databases search results (Medical Information Bureau, prescription database report, and Motor Vehicle Report) to conclude whether or not to approve, deny, or rate up a life insurance policy.

What does it mean when a policy is “fully paid up?”

“Fully paid up” means that you have paid enough premiums to cover the cost of the policy for the rest of your life, and the company will use the cash value to pay your premiums until you die.

What happens if I miss a premium payment?

Most policies have a 31-day grace period wherein you can pay the premium with no penalty or interest. If you have a term policy and do not make the payment within this grace period, the insurance company will usually terminate the policy. If you have a permanent policy, you can authorize the insurance company to draw your premium from your policy’s cash value.

What if I die without life insurance?

Life insurance’s primary purpose is to prevent financial hardship for your loved ones. Whether it’s burial expenses or mortgage balance you worry about, a proper life insurance policy can help your beneficiaries avoid this misfortune.

Can I buy life insurance for anyone I choose?

Sure, provided there is an insurable interest in a relationship and with the insured’s consent. Insurable interest is a reason to buy life insurance for someone else because you could undergo a financial disaster if they die. A relationship can be:

Husbands, wives, or children
A business owner can buy life insurance on his key employees
Creditors are allowed to take a policy on their borrowers.

Can I get a better price if I buy directly from the insurer?

Not really, Life insurance prices are fixed by law and are subject to the insurance carrier and the state’s department of insurance approval. If that were the case, brokers, agents, and the insurance companies couldn’t compete ethically in the marketplace, and consumers would be even more baffled with life insurance.

You may choose to work with us because as a brokerage house I can shop all companies and offer you the best one for your situation. Besides we don’t charge a fee because we get paid by the insurance carrier.

Can I buy more than one policy?

Sure, you can, provided there is a financial need for it. You may want to supplement your current policy from work or add another term life insurance because you just had a new addition to the family. The insurance company is more interested in the total death benefit amount you currently hold rather than in how many policies you have.

What are risk classifications?

Risk classification, also called health classification, is a method the underwriter uses to determine the risk you pose to the insurance carrier. A fundamental concept is the higher the risk, the more you will pay in premiums; the less of a risk, the less you will spend.

Additionally, since it’s impossible to determine one person’s mortality with absolute accuracy, the carriers group individuals with similar risk and calculate their rates. These groups are called classes.

How does the insurer know I died?

Your designated beneficiary will have to file a claim with the carrier. He will also need to supply the death certificate (not a copy) along with the deceased’s policy number, social security number, and address.

How much life insurance can I buy?

In insurance lingo, brokers refer to this question as part of the financial underwriting process. The amount of coverage you can buy must reflect your economic value. There are a few ways to justify the requested face amount by calculating your assets and liabilities.

However, most companies follow this simple formula: the younger an applicant is, the more coverage he needs because the children are still young, the mortgage balance is still outstanding, so passing away in these critical times could devastate the beneficiaries.

Nevertheless, once the applicant is older and has fewer liabilities to protect (children are older, the mortgage is paid off), the less coverage he will qualify for.

Here is a basic formula to estimate the maximum coverage you can receive:

Up to age 40: You can buy 35 times your yearly income.
41–50: You can buy 25 times your yearly income.
51–60: You can buy 20 times your yearly income.
61–70: You can buy 10 times your yearly income.
71–80: You can buy 5 times your yearly income.

Do life insurance check criminal records?

Yes, In Canada most life insurance will check if you have a criminal record. They can have varying time frames that they check in regards to your criminal record, some companies want to know if you were convicted in the past year, 2 years, or 5 years, while other companies want to know if you were convicted in the last 10 years or indefinitely.

What to do if my application was declined?

I see that quite often, and many times, an applicant can reapply with a different company and get coverage. However, a better way to remedy this is first getting the facts right. What was the reason you were denied coverage in the first place (see a letter of declination if you don’t know the reason)?

Second, get a good broker and disclose those facts to see if he can match you with a different insurer. The worst thing you can do is to apply to eight different companies to see who can issue you a policy because the more you get declined, the easier it is for other companies to follow suit and not approve your policy.

Does life insurance cover suicide?

First thing first: If you or someone you know is considering suicide, please talk to someone about your thoughts. The suicide provision states that, if you die within two years after buying the policy as a result of suicide, the carrier will contest your claim and will not pay your beneficiaries. After two years, an insurer can’t challenge the death claim and must pay the benefit.

What is accidental death and dismemberment insurance?

If I had to rank the number one reason clients are so angry, it is discovering they just bought accidental death and dismemberment (AD&D) and not a traditional life insurance policy. Since many potential buyers don’t understand life insurance nuances, they fall prey to the wrong brokers or agents who just sold them on the idea that they bought life insurance at the best price.

An accidental death and dismemberment policy pays a death benefit to beneficiaries ONLY if you die as a result of an accident-related event. If you had cancer, heart attack, stroke, or any disease and died as a result—you guessed it—your beneficiaries will get zilch.

Do I need life insurance if I have it through my employer?

You probably do. Most group coverages aren’t portable, which means if you lose or quit your job, you also let go of your insurance coverage. Most importantly, group coverage doesn’t offer sufficient protection and typically offers two or three times your yearly income, which by all accounts, isn’t enough. (The recommended amount is 10 times yearly income.) My advice is to get it through your job if it’s free or at a reasonable price and supplement it with life insurance outside your workplace.

Do I need to buy life insurance for my parents?

That depends. You should ask yourself these questions first.

What is the policy’s purpose? Burial, asset protection, or estate planning?
Are you taking care of them?
Will you suffer financial loss if they die?
Do they have assets you can use to pay for burial expenses?

If you only need burial insurance for them and you have the money to cover it, or they have enough assets to pay for it, skip the policy and call it a day. You don’t need it. You can also read more here.

What is Universal Life insurance?

Universal life insurance, also called UL, is a permanent type of coverage that provides guaranteed death benefit payment to heirs, cash value accumulation on a tax-deferred basis, and the ultimate advantage of flexibility. A portion of your premium payment goes to cover the cost of insurance (COI), and the remainder is parked in a designated account to earn interest.

Most companies give you three to four different accounts from which to choose based on your comfort level and financial goals. Most coverages are rigid. In essence, term life offers great costs but short duration, whole life provides a lifetime’s protection but with astronomical prices. UL provides the flexibility to skip premium payments or to adjust the face value in the future (increase or decrease) should you want to.

What is Key Person Life insurance?

Key person life insurance is protection a business owner can purchase on key employees to cover premature death. A key employee is a valuable asset to a company because he/she holds a special talent or skill that is hard to replace. For instance, if you own a tech company and have a highly skilled developer whose death would essentially cause your business to diminish overnight, you may consider key person life insurance.

Why did I get conflicting life insurance rates?

Oh someone has already spoken to you or calculated rates online. Did the other broker question you about your health history, or they just calculated the preferred rates. Note that it’s the underwriter and not the broker who determines your final costs. A broker’s job is merely to estimate the rates as accurately as possible based on your unique circumstances so that you will not be surprised when the underwriter comes back with the final prices.

Why do insurers ask me about my family history? I Thought I Was Applying, Not Them!

As mentioned before, life insurance underwriters specialize in assessing mortality risks. Unfortunately, some diseases, such as cancer, cardiovascular, diabetes, or stroke found in parents can increase the likelihood of you developing the same conditions. Keep in mind that most companies are only interested in death before the age of 60 of an immediate family member, and you will not be denied coverage if this is the only risk you pose. Instead, you will be charged a higher rate.

I Filed for Bankruptcy. Why did the life insurer deny my application?

Having a bankruptcy on your record poses another risk to the insurance company. You may be the healthiest person on the planet and still be denied coverage. The reason is simple: the carrier is the last one to profit from your policy. They pay for the medical nurse to perform the exam, agent’s commissions and doctor’s medical records among many other expenses before they see a dime.

If you just had a bankruptcy, the insurer believes that you will not pay for the coverage you just acquired. (After all, you filed for bankruptcy. How can you afford to pay for life insurance?) So, the cost of doing business isn’t worth it at this point. However, two years after the bankruptcy is discharged, you can reapply without any issue.

What is mortgage life insurance?

Mortgage protection insurance or MPI is a type of life insurance which pays your mortgage balance in the event of your death. The beneficiary is the lending institution and not your immediate family. Additionally, the face value will diminish over time in direct proportion to your mortgage balance.

If I stop smoking today, will I get a non-smoker rate?

Nice try! You probably know that smokers pay two to four times as much as non-smokers do, but this trick wouldn’t work. To get the best non-smoker rate, you must abstain from tobacco for three to five years (each company has a different underwriting guideline).

Some companies will give you a standard non-smoker rate after one year of abstinence. It’s worth mentioning that you should never lie about your smoking habits to the insurer.

What does disability insurance provide?

Disability insurance can provide between 60 to 85% of your salary or regular income for a specified time. If you cannot work temporarily

How much disability insurance coverage should I have?

Disability insurance is a safety net as a source of funds for a person or family should an accident or illness occur and prevent a person from working for any amount of time. There are multiple factors that should be considered if you want coverage that will provide similar quality of life you experienced before an injury or illness made you unable to work.

Factors to consider include:

Risk Assessment. What type of job do you have? What are the dangers or risks? What type of lifestyle do you live? Is there high or low potential for risk of injury or illness?
Financial Resources. Do you have any savings or investments that you can fall back on if needed? How long could you last off of your savings?
Family Responsibilities. Does anyone depend on you and your income? If so, how many dependents are there? Are you legally financially responsible for anyone? Does anyone share family financial responsibilities with you?
Current Debt. How much debt do you have? Do you rent or own? If you own, what is your mortgage? Do you make car loan payments, credit card debt payments, or other payments? If so, is there another policy you have that would cover these payments, like creditor's insurance?
Lifestyle. What is your current standard of living and what are the costs to maintain it? If you have to scale back, would you, and if so, by how much?

How easy can I get disability Insurance?

As easy as 3 steps: 1.Speak to our licensed agent 2. Provide your details 3. Get covered

Who is eligible for disability insurance in Canada?

Most providers will cover Canadian citizens and permanent residents / landed immigrants between the ages of 18 and 55 who work a minimum number of hours per week. You may still be eligible even if you have a pre-existing condition, but it may be excluded from your policy.

What benefits do I get with Disability Insurance?

When you invest in disability insurance, you and your dependents have peace of mind knowing that income flow will continue during the period when you are unable to work. These policies will cover you for one of the following:

Any occupation: You are protected if you are unable to perform any kind of work, even a less-demanding job.
Own occupation: You receive payments if your disability prevents you from working at your regular job. Many employers and private insurers offer ‘own occupation’ coverage for the first two years of disability and switch to ‘any occupation’ after that.

Depending on the policy, some disabling conditions that are unrelated to illness or injury may be covered. One common example is serious complications arising from childbirth.

These benefits are usually paid for up to two years if you can’t do your regular job but if you are unable to work at all, the payments could potentially continue until you are 65.

What is the best type of disability insurance?

There are two main types of disability insurance. Both pay a benefit that replaces a percentage of your income, but they work differently because short-term financial needs differ from long-term ones.

Short-term disability insurance

Most disabilities don’t keep you out of the workforce longer than a year. Short-term disability insurance, or STD, is designed to provide you with an income while you take time off to recover from illness or injury. Depending on the policy you take out, you can collect benefits for up to six months and even take advantage of resources that help you return to work sooner.

Long-term disability insurance

There are some disabilities that are more severe and can even be permanent. Long-term disability insurance, or LTD, is for these situations because the benefits can last for years. It is often purchased as an individual policy by higher-income business owners and professionals who want to protect their lifestyle if they are no longer able to work.

How much disability insurance coverage do you need?

The key is to have enough coverage to meet your living expenses, which include food, hydro, rent, transportation, taxes, and your rent/mortgage. For some people, this means at least 60% of your regular pre-tax income while those who don’t have children or who have paid off their mortgage could get by on 40% to 50%.

Bear in mind that most disability policies have a benefits cap, such as 65% of your gross income, but only up to $3,000 a month. If you’ve been earning over $70,000 a year, this coverage may be insufficient. In this case, you may want to look into a private disability policy to supplement the benefits offered by your employer.

What are the chances I will use disability insurance?

Although you naturally hope that disability won’t happen to you, statistics suggest that it’s smart to take precautions.

For example:

The average 30-year-old Canadian has a four times greater chance of becoming disabled than they do of dying before age 65.
One in six Canadians will be disabled for at least three months before they turn 50.

There are two primary policy options that cover incidents or illnesses: long-term disability and critical illness. Both types cover you financially if you become disabled or ill, but there is a difference between the critical illness and disability insurance. Notably, disability pays a monthly income while critical illness insurance provides a tax-free lump sum amount after you’ve been diagnosed with a covered illness.