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Welcome. Today we will be talking about life insurance, and the benefits that are included with opening up a policy.

Life insurance can be defined as a legally binding contract between an insurer, and a policyholder. Throughout the lifetime of the policyholder, they will pay installments, and this contract will guarantee that the insurer pays a sum of money to chosen beneficiaries in the tragic event of the policyholder passing away.
From this padlet, you will learn who should get life insurance, and why, how life insurance works, types of life insurance, how to qualify, and additional uses for life insurance.

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Get You On The Right Track -

This website seems to be very beneficial because it not only informs you on why you should consider looking into life insurance, it also provides tons of tips to help you in other ways, such as money-saving tips. Within the ”Life Insurance Canada - A Guide To Get You On The Right Track” article you will gain knowledge on the following topics, what is life insurance, types of insurance, permanent vs. term life insurance, lists of insurance companies in Canada, and you can even find questions asked by other people.

I like this website because they mention some very good points on why you should get life insurance, like “who will be financially impacted by your death?”. I also like it because they do not try and pressure people into life insurance, instead they have created a technique to simply ask yourself “whether life insurance is worth it for you”. Unlike other websites, they give accurate estimates when talking about the price of death costs, and get you thinking by mentioning that your funeral can very well double the price of that. They say it can cost anywhere up to $8,000 for your basic needs, and wants, which got me thinking about how I would never want to leave that for my family.

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Who will be financially impacted by your death?

That's the most important question to ask yourself when considering whether life insurance is worth it for you.

Are you missing important insurance coverage? Make sure you're covered - here are 4 essential types of insurance in Canada

It's hard to think of the end of our lives, but the reality is that the people who love us will keep living once we're gone. It's a fact that can't be ignored.

And our deaths will be expensive. Funeral bills, medical payments, paying our debts ...not to mention the people who depend on us will suddenly be left without support.

So no matter how old you are, there's never a better time to get life insurance than right now. It's important to be prepared for the inevitable, whenever it comes.

What is life insurance?

Life insurance is a contract that says your insurer will pay out a certain amount of money (called the death benefit) to your beneficiaries when you die. In most cases, your beneficiaries are your spouse and/or children, but it's ultimately up to you to decide.

Some types can also be paid out before your death in the case of terminal illness.

While you're alive, you pay a certain amount of money to your insurer monthly. This is called the premium and it's largely based on your age and health. The younger and healthier you are, the cheaper your premiums are.

What do you need it for?

The death benefit can then be used to cover things like funeral costs, end-of-life medical bills, estate settlement costs, and any outstanding debts.

As shown in this article, death costs can pile up quickly, costing you upwards of $8,000 for your basic needs and wants. This price can easily double depending on how lavish you want your funeral to be.

What's more, anyone who has dealt with the death of a loved one knows that the bills don't stop at your funeral. There are plenty more expenses that come up along the way.

And if you're leaving behind dependents, your life insurance can make sure they aren't suddenly without any support.

Related: Start Planning For Your Retirement Right Now

Types of life insurance

Your options for life insurance can essentially be divided into 2 broad categories:

Since your premiums get more expensive the older you get, if they had to be renewed every year, you'd constantly be paying more and more.

Term life insurance

That's where term life insurance comes in. Your coverage lasts for longer and your payments are averaged out over the entire term.

This way, your payments stay steady until the end of your term, which is usually 10, 20, or 30 years long.

So if you were to take out a 10-year term life insurance, your premiums would only increase every 10 years. Otherwise, it stays the same.

Renewable term life insurance

Renewable term policies will automatically renew at the end of the term, but with a new (higher) premium.

The new premiums tend to be quite high and usually require another medical exam, so people seldom opt for this offer in recent years.

Conversion term life insurance

Essentially, conversion term life insurance gives you the option to convert your term insurance to permanent without having to take another medical exam.

This would be incredibly useful if you develop a disease that would either skyrocket your premiums or make you uninsurable.

Permanent life insurance

Permanent life insurance is similar to term, except the premiums are averaged over your entire life. This way, they'll never go up.

You'll pay a bit more at first than you would with term life insurance, but once you're older you'll actually pay less. It all balances out at the end - pay more now so you can pay less later.

Whole life insurance

Whole life insurance basically takes the extra money you pay when you're younger and saves it to cover your lower payments later in your life. This is called reserving.

If you cancel your whole life insurance, the company may actually refund a percentage of your reserve, since they no longer have to cover your later (cheaper) premiums.

Term to 100 life insurance

Term to 100 life insurance is similar to whole life, except the premiums are lower and you have no option for cash redemption if you cancel it early. Everything, including your premiums and the death benefit, stays stable throughout your life.

Universal life insurance

Universal life insurance is a bit more complicated.

It also covers your entire life, but it splits your payments in 2: the cost of the insurance and your investment.

The first part is defined by the insurance company and stays level throughout your life. Anything you pay above this predetermined amount will go towards the investment portion. This part is up to you and could be as low as $0.

Permanent vs. Term life insurance

Here's a graph from LifeInsuranceCanada.com that does a good job at demonstrating the difference between the 2 main types of insurance:

The red line indicates how much you'd pay if your coverage was on a yearly basis. Longer terms cost the same in total, but in more of a staircase pattern. This helps keep things steady throughout your life.

But if you want it to be even steadier, the orange line represents the cost of permanent insurance. As you can see, you start off paying much higher premiums, but the cost of term life insurance becomes much higher near the end of your life.

List of life insurance companies in Canada

Here are some of the biggest life insurance companies in Canada and the kind of packages they offer. This is not complete by any means, but it's good to give you an overview of what you could be looking at.

But that's not all...

You have other options as well, but they don't have as much information readily available on their websites. Here are some summaries:

Frequently asked questions about life insurance

Have some more questions about life insurance? Don't worry, we've covered a few more of the basics here.

How much life insurance do I need in Canada?

The general rule of thumb looks like this:

(Immediate + ongoing expenses) - (Money resources) = the coverage you need

Immediate expenses include:

funeral costs,

estate settlement costs,

mortgage, as well as

any outstanding loans and debts.

For ongoing expenses, be sure to include your annual salary and times it by the number of years you think your dependents need to be supported for. Also consider including future care and schooling costs for your children.

Resources include:

any investments you have,

your spouse's income (if applicable),

any rental income,

your work's coverage, and

your personal savings.

An example using the Canadian averages

Take Robert, a Canadian living an exceptionally average life. He's in his mid-30s with 2 kids and a lovely wife.

If he were to look into purchasing life insurance, the first thing he'd want to figure out is what expenses he'd leave behind.

On average, this would be his immediate expenses:

Funeral cost: $8,000

Remaining mortgage balance: $198,781

Household consumer debt: $22,154

Adding these together, Robert has a total of $228,935 in immediate expenses.

His ongoing expenses includes his salary, which is the Canadian average of $44,700. His kids are 8 and 10 years old, so he estimates they'll need support for about 8 years if he were to die. This would mean he'd need another $357,600.

But that's not all. He would also like to prepay his children's university or college education. Because the average cost of Canadian tuititon is $9,300 per year (if they live at home), Robert is looking at another $74,400 - assuming both children attend university for 4 years each.

This brings his total ongoing expenses to $432,000.

Now he has to calculate any resources that could be used towards these costs and help out his family.

His wife earns slightly above the average income at $50,000. So to help support their children if Robert were to pass away, she'd be able to contribute $400,000 over 8 years. He also has $5,000 saved up that can help his family get through this difficult time.

His total resources for money comes to $405,000.

So for Robert, his formula looks like this:

($228,935 + $432,000) - ($405,000) = $255,935 coverage needed

$250,000 would be good coverage for the average Canadian, but it's important that you take a closer look at your personal situation. Here's a calculator provided by the government of Canada to help you figure things out for you and your family.

What happens if I have no life insurance?

If you don't have life insurance, all your expenses would fall directly on your family. They'd be expected to cover your funeral and medical costs, as well as any debts and other expenses that come up.

If you're over 40 and worried that your health isn't in good enough shape to qualify you for some coverage, many companies offer guaranteed acceptance programs, usually for people between the ages of 40 and 75. They most often don't require a medical exam.

Some coverage is better than none. Your death will be hard enough on your loved ones without having to shoulder some major financial burden.

Do I need a life insurance broker?

As with every major purchase, it's good to have a helping hand so you can make the best choice possible.

A life insurance broker can help identify your needs, as well as work through the options available to you.

A tip for finding a good broker is to make sure they have more than the minimum licensing required to be considered a broker. You can also look for things like experience and reviews, as well as how they get paid - if their compensation is commission based, they're more likely to upsell certain products so they get paid more. Finding a broker who's paid at a flat rate can help eliminate this risk.

Make sure to shop around, you want to make sure you find the right person who will care about you and your needs - not their own profit.

Related: 11 Signs Your Financial Advisor Is Robbing You Blind (And How To Stop It!)

What's the cheapest life insurance in Canada?

Using this site, I looked up quotes for $250,000 coverage for a 35 year old non-smoker in exceptional health. I also only looked at insurance companies with a rating of at least A- in order to keep the results to trustworthy companies only.

Numbers for men:

Numbers for women:

Keep in mind this is all subject to your age and health, plus the company you're going with and any benefits you may get with them.

What's the best life insurance company in Canada?

This largely depends on what factors you consider important.

So, what about you?

Do you have life insurance? If so, did you go with term or permanent?

How much coverage did you estimate you need? Has that changed as the years go by?

Let us know in the comments below!

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Life Insurance Canada - A Guide To Get You On The Right Track | How To Save Money

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What is life insurance? A lot of Canadians are behind on the basics, like the difference between term life insurance and permanent...Find out what types of life insurance are available in Canada so you can figure out what's the best fit for you - and cover your loved ones in their time of need.

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Why Millennials Aren't Buying Life Insurance, and Why They're Wrong -

This website provides legitimate percentages showing how, and why millennials do not have life insurance, and why they won't look into it. In this article you will also find a harsh, but truthful approach as to how millennials are wrong for not getting life insurance, and why they should.

I like this website because it specifically refers, and talks about millennials, and does so using graphics, which helps to make it more enjoyable to read. I also really like it because not only do they talk about your spouse, and children, they also mention how you can help your siblings, and/or “aging parents” which is sad to say… but something that never even slipped my mind. Unlike other websites, this article provides statistics on a lot of different things like, how many people claim they can not afford life insurance, what other costs are affecting people from being able to afford life insurance, how many people have life insurance, how many people wish they had more life insurance, etc.

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Only 52% of Millennials have life insurance, but a whole lot more than that have loved ones-spouse, partner, kids, aging parents-that need financial protection if something were to happen to them. Here's what the 2017 Insurance Barometer Study by Life Happens and LIMRA found:

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Here's Why Millennials Aren't Buying Life Insurance (and why they are wrong!) - Life Happens

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Only 52% of Millennials have life insurance, but a whole lot more than that have loved ones-spouse, partner, kids, aging parents-that need financial protection if something were to happen to them. Here's what the 2017 Insurance Barometer Study by Life Happens and LIMRA found:

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Canada Protection Plan -

Within this website you will find two options at the top right of the page where you can find an insurance calculator, and where you can recieve a “quick quote”. You will also find options to choose from like no medical & simplified issue life insurance, critical illness insurance, health & dental insurance, and travel insurance, which I think is very useful if you are just looking to test the waters of insurance.

I like this website because it provides you with the option of receiving a quote, super fast by just filling in a quick 5 question survey, and they have different articles you can find as to how important life, and critical illness insurance is, how much life insurance you will need, and why you should choose them for insurance. Something about this website that I have not seen on another is their insurance calculator. This is where you fill in your cash needs, income replacement, assets, and insurance and they will provide you with a quick calculation on your total amount of recommended life insurance.

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With answers to a few simple questions, you'll see how affordable the rates of our most popular life insurance plans can be.

The minimum premium amounts accepted are $15 a month or $150 a year. The minimum coverage is $25,000 on Quick Quote. If you require coverage below this amount, please contact us and a quote will be provided.

If the coverage amount exceeds the maximum coverage allowed, Quick Quote will show the premium at the maximum coverage amount.

Quotes are for our most competitive plan. Your actual premium will be based on the plan selected for which you qualify.

Get a Personalized Quote

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Life Insurance Quote | Canda Protection Plan

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With answers to a few simple questions, you'll see how affordable the rates of our most popular life insurance plans can be. The minimum premium amounts accepted are $15 a month or $150 a year. The minimum coverage is $25,000 on Quick Quote.

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Life Insurance Canada -

This is specifically a government of Canada website which helps me believe it is one of the best. On this website you will find out plenty of useful information like deciding if you need information, term life insurance, permanent life insurance, and everything you need to know about naming a beneficiary.

I like this website because it comes strictly from Canada of course, but I also like it because it gives a lot of information that I have not yet found on any other sites. Some of these things are like how you would go about cancelling your insurance if needed, health insurance, and living as a couple, which is something I feel like could be very useful to many people including myself. I also really like this website because it talks a lot about your beneficiary. One thing I did not know about that is that there are two types of beneficiaries. A revocable beneficiary, and an irrevocable one, and I think that is very important, and everybody should do their research before naming a beneficiary.

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Term life insurance, permanent life insurance and how to name a beneficiary.

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I find this to be an awesome image because it really gets you thinking. The questions in this graphic state "Who? Why? When? for Life Insurance" which I feel is very helpful because it explains exactly that, who should get a policy, why they should look into it, and when you should.
https://www.cpp.ca/blog/who-why-when-for-life-insurance/

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This image can be deceiving, but to me it is motivational. If you are going to get life insurance for anybody, it should be your child(ren), and/or significant other. Death is such a traumatic experience, and If you can help your loved ones one last time, it should be this way. Help them find some comfort in knowing you cared. Not only will you help relieve them of some funeral expenses, and perhaps debts, you might also help them with a down payment on a home, a new car, a college degree, etc.
https://compareinsurancesonline.ca/top-20-life-insurance-companies-canada/

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This video gives a great amount of information from someone else's perspective. It is a man named Peter that states his perspective changed once he entered new phases in his life such as, fatherhood, and growth in his professional life. He discusses the different insurance terms that you can choose from like term insurance, and permanent insurance and provides a lot of good information, and examples on both. He mentions what he does, and doesn’t prefer, and what other clients have gone through when choosing an insurance term.

I  like this video because he gives his own opinion which can help give people more to think about. Something I learned from this video that I haven’t seen in another one is “discretion”. He mentions how you can make it so that each party would be treated equally(Often in second marriages,etc). I like this video because he makes a good point by mentioning what if something did happen to you, and your children received some asset within their inheritance that they wanted to keep, but had to sell in order to pay off taxes, or another debt in your name..I like that because it's true, and very relevant. I don’t blame my grandpa in any way, shape, or form, but when he passed away leaving nothing behind, my uncle had to sell his car, and many other belongings to pay for his funeral, and that is something I hated about myself, I wish I had enough savings to pay for it myself so I could have kept a few of his things.

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How Much Life Insurance Should You Buy in Canada?

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Video #1 is a short, but informal one minute video from Manulife. A company with over 133 years of experience. They explain how insurance works, and they talk about premiums, and how they set a lot of it aside to pay for your future claims, then explain how they invest the other little bit into government, and corporate bonds, real estate, etc.

I chose this website because they seem like a nice, truthful company that won't let down their customers. They mention that they have 133 years of experience, which in my opinion is mind blowing, and they also mention that almost 30 million people worldwide have been working with them for either insurance, banking, or wealth management requirements. Something that really caught my attention within this video is that the lady speaking says that their Canadian regulator asks customers to set additional funds aside just in case anything else might happen, I like that because they use the word “ask”, and they are explaining exactly what the money's for rather than charging insurers more, without even telling them. (Such as the car leasing video we watched).

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A lot has changed in the last few months. What hasn't changed is our commitment to you.

When you choose Manulife, you choose a global leader in financial solutions with 133 years of experience.

With everything going on, you may be thinking about your coverage ... so we thought we'd take a minute to talk about how insurance works.

When you pay your premiums, we set aside most of that money in reserve to pay out future claims.

We invest the reserves in a diverse range of assets - from government and corporate bonds to commercial real estate, infrastructure and more.

The Canadian regulator, who oversees Manulife's global business, asks insurers to plan for the unexpected by setting extra funds aside.

So, whenever you need to make a claim, we're here for you.

We're proud that nearly 30 million people worldwide choose us for their insurance, banking, and wealth management needs.

We've got you covered.

So you can stay focused on what matters most: being there for the people you love.

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Insurance explained. How it works. | Manulife

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A lot has changed in the last few months. What hasn't changed is our commitment to you. When you choose Manulife, you choose a global leader in financial solutions with 133 years of experience. With everything going on, you may be thinking about your coverage ...

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1. What did you learn about your topic that surprised you the most?

While researching the life insurance topic I actually learned a lot. One thing that specifically stood out to me was that there are different options when choosing a beneficiary. There is a term called "revocable beneficiary" which is where you are able to remove, and change your desired beneficiary without even having to tell them, and then there is another term called an "irrevocable beneficiary" which is when you need the beneficiaries written permission before you are able to make any beneficiary changes.

2. Provide a real-life example of how this topic is relevant or interesting for you.

When my sibling was 2 our great grandmother had won the lottery then suddenly passed away, but before passing she set aside $10,000 for him when he turns 18, but once he turned 18 he received nothing. After starting college at 20, and adding debts to his name he asked my grandmother( the trustee) about the money and it was unveiled that she had taken the money, and used it herself. She said she would pay him back but again, he received nothing, and now as of 2019 she has passed away, and my sibling being 26 now still has never seen one penny of the money. This topic is very interesting to me because once learning more a lot of stuff seems to make sense to me. After learning about how there are different types of beneficiaries it makes me think a lot more about what type I would want, and whom I would trust to be my daughters trustee.

3. If you could pass on your knowledge to a family member, or friend, what do you think is the most important thing to pass on?

If I could pass on some knowledge to a family member, or friend I feel although the most important thing to pass on would be to let them know there are various different options when choosing a policy type, some of these options include term life insurance, permanent life insurance, whole life insurance, and universal life insurance. I feel as if this is an important piece of information because in some situations your policy can end, and your chosen beneficiaries will not receive anything. You should also be very careful when choosing the right policy because some offer cash value, and loan options so if you do not believe you can be trusted with a loan, perhaps you should stay away from those types.

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Video #2 is another short video, almost 2 minutes long, but it is just amazing! There is no talking, so you have to read but it is presented in a great format, and gives very specific details, all while using plenty of examples, and statistics to try and show people why they should be looking into life insurance. They say “Life Insurance: It’s worth it” and they do really make it seem that way.

I am in love with the way this video is presented because it is honestly exactly what goes on in my head. They talk about whether you could live without a cellphone, technology, entertainment, a home, etc. then ask “What about your family?......Could they live without you?”. Absolutely I think that everybody needs to enjoy their life, and obviously should not go without, because they feel their family needs it more (If that makes sense) but there are so many things you can balance out in order to get what you want, but still be able to provide for your family when the time comes. Treat yourself to take out once a month, or even every two, rather than once a week, get a lower plan for your cell phone, and save a little bit each month. That extra bit of money can go towards saving for your family's future. One thing I found useful is their motto “It’s worth it” I know it is, and I wish everyone felt the same way!

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Get help protecting your family and your business if something happens to you. At The Co-operators, we have life insurance products to provide coverage for all the stages of your life.

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This video is a little longer than my previously posted ones but it explains a lot of good points. A man Thomas talks about why we need life insurance, and defines it as a "gift for your family" which I believe is an amazing way to think about it! He discusses basic terminology, and will help give you a great understanding of all the different types of terms. He mentions how life insurance will not be a taxable income for your beneficiary. He talks about how much life insurance will cost you, and even compares it to "ordering one large pizza each month".

I chose this video because we have watched some of his videos before, and he makes things really fun. Fun fact: One piece of valuable information I learned from this video is that your beneficiary does not necessarily have to be a family member, or friend, but can also be a charity, or even PET!!

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How Life Insurance Works in Canada | Insurance 101