The Life Insurance Checklist for Canadian Shoppers

A Term Life Insurance Shopping Checklist

When shopping for term life insurance, you want to find the right amount of insurance coverage at a reasonable price with an insurance company you can trust. But for many people, getting started is the hardest part. That’s where the following Life Insurance Checklist from Life Guard Insurance can help.

1. What you would like your policy to achieve?

Ask yourself what it is you want your life insurance to do. For example, do you want to have insurance coverage that will:

• Pay funeral arrangements?
• Pay the outstanding balance owing on a mortgage and other debts?
• Offset the loss of your income? And if so, for how long?
• Contribute to the future education of your children?
• A combination of all or part of the above?

Knowing what you would like to accomplish with your life insurance policy and approximately how much you need to achieve these goals will help you determine how much life insurance you should consider purchasing. Our Life Insurance Needs analysis calculator is available to help you put a dollar value on the amount of coverage you need.

2. Who would you like to insure under the life insurance policy?

Most insurance companies offer a variety of life insurance products to suit your lifestyle and family needs. You can get an insurance policy on your own life, or you can get one policy for both you and your spouse (called a joint-life or multi-life insurance policy). There are usually discounts for combining life insurance coverage for joint or multi-life policies with the same life insurance company.

3. How long will you need life insurance?

Using a crystal ball to see the future isn’t necessary, although you should use a reasonable estimate of the length of time you will need life insurance. For example:

• When will your mortgage be paid off? The amortization period of your mortgage will often determine how long your term life insurance policy should be.
• When will your children be finished school? One day they’ll finish their education and having enough life insurance coverage to pay their educational expenses won’t be necessary.
• When are you planning to retire? You will have less income to replace and have built retirement savings at that time.

Knowing how long you’ll need life insurance coverage before you begin shopping will ensure you’re comfortable with the life insurance product you end up purchasing. Our instant online life insurance quoting tool can show you term 10, 20 and 30 year plans and even Term 100 life insurance for permanent coverage.

So now that you’ve got the how much, who and how long questions answered, you’re ready to shop.

1. Compare life insurance quotes from multiple companies:

It pays to shop around because life insurance rates can vary considerably depending on the product you choose, your age, and the amount of coverage you request. This is the easy part, because with life Guard Insurance you can compare all life insurance companies with an instant online life insurance quote anytime. The results will display the top ten life insurance companies in order of least to most expensive policies.

2. Which life insurance rate has been quoted – standard or preferred?

There are two basic life insurance rate groups you should know about when shopping for life insurance coverage: standard rates and preferred rates. Standard life insurance rates are the rates the majority of Canadians qualify for, while about 30% of the population is eligible for preferred rates.

Preferred life insurance rates are typically offered to very healthy people and means you may pay a smaller premium than most. Usually preferred rates are offered only once the results of the medical information and tests are known. It will depend on your blood pressure, cholesterol levels, height, weight, and family health history. But preferred rates are worth it. They could save you up to 30-35% off your quoted premium.

When comparing prices, make sure you’re comparing ‘standard to standard’ or ‘preferred to preferred’ life insurance rates. If you’re not sure, ask our brokers. It would be disappointing to find out you were quoted preferred rates at the beginning, only to find out you don’t qualify for them later. We suggest you quote standard rates and hopefully you are pleasantly surprised with a discount.

3. Review the life insurance broker’s availability:

How easily can you get a hold of the broker? What are their hours of operation? Whether it is through their website or telephone, the life insurance broker should be easily accessible to you should you ever have questions or need to speak to them about a change in your life insurance needs. All life insurance brokers partnered with Life Guard Insurance are local to your area and are available to help you in person, over the phone or via email.

4. Review the medical information required to obtain the policy:

Typically the more medical information you provide, the better the price. For a policy that asks few or no medical questions, you can bet the premium is higher for the same coverage then a plan asking for more information. Depending on the company, your age, and the amount of coverage you want, you could be asked to provide blood and urine samples, do a blood pressure reading, etc. This is called a paramedical exam, and a nurse will visit at no cost to you to complete it.

5. Consider a life insurer’s financial stability and strength:

A company’s financial stability is something to consider if you are planning on making a long-term purchase like life insurance. There are organizations out there, like A.M. Best, which evaluates insurers and provides a rating on their stability and strength. Also, all life insurance policies in Canada are backed by Assuris for consumer protection.

6. Ask about renewal options and requirements:

Once the initial premium is set, it is usually guaranteed for the length of the policy (often 10 or 20 years). But what happens when the policy expires? Most policies are renewable until you are 70 or 75 so don’t forget to ask your broker if you will have to take a medical to renew your policy. While your premiums will be higher on renewal, find out if they will also be guaranteed to remain level for the second term of the policy.

7. Confirm the policy can be cancelled without penalty:

Most term life insurance policies can be cancelled at any time without penalty. Make sure to check with your broker to see if the life insurance company has any unusual cancellation policies.

8. Consider the conversion options and restrictions for the policy:

As your life changes so do your life insurance needs and you may want the option to convert your coverage some day.

To convert a term life insurance policy means to transfer all, or part of the death benefit of the policy into a permanent life policy without a medical. For example, say you originally bought a term policy to protect a mortgage and children. Once the mortgage is paid and the child have grown, you might find it desirable to convert the policy into one that will give you a new level premium for the rest of your life, and a death benefit that is guaranteed not to expire as you age.

When you purchase your life insurance policy, find out if there are any limitations on your age at the time of conversion. In most cases, you have the option of converting up until you are 60 or 65. As well, ensure you are given several options of the type of policies you can move into: the more the better.

Final tip – Life Guard Insurance can help with your life insurance checklist

If you need help shopping for or applying for term life insurance, our local life insurance brokers can assist you. We have independent life insurance brokers across Canada who can find you the most competitive price for term life insurance and can walk you through the life insurance checklist so you know what you’re really buying. Contact us today.

The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about a life insurance checklist would be very much appreciated.

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