Life Insurance

What are the different types of life insurance products?

1. Term Life Insurance

Term life insurance is an insurance product that will expire at some point and would have to be renewed or get a new policy. If your unforeseen death happens during the period of a specific term insurance, there will be a payout. It is also known as a death benefit. There are many types of term-life insurance policies that range from 10, 20, and 30-year renewable or even up to a 100 year (a.k.a known as Term 100)

2. Permanent Life Insurance

Permanent life insurance is essentially an insurance policy that remains till the day of your death. There is a return of profit with term to 100 policies which can be used for paying future premiums, buying out policies all of which the dividends accumulated will earn interest.

3. Critical Illness and Disability Insurance

These are policies that will pay you a lump sum if you are diagnosed with a terminal illness that is clinically diagnosed. However different companies will have different criteria’s on the what types of illnesses they will cover. These policies are attractive in a sense that if no claim is made, you are entitled to your money back. With disability insurance, your background and history would have to be squeaky clean. That means no neck pain; bad backs and you don’t climb Mt. Everest every weekend. The reason it is hard to claim disability insurance is because it is very difficult to diagnose problems and cures are stretched.

What is Universal Life Insurance?

1. Unbundled 2. Term element 3. Cost of insurance (1, 10 or a guaranteed 10 year ) 4. The investment portion (Invest in GIC, mutual funds)

What is mortgage insurance?

Mortgage Insurance essentially covers the balance of your mortgage owing. It is also known as a decreasing term insurance as your coverage decreases as you pay down your mortgage. While your coverage decreases, your premiums stay the same. Your policy is valid for as long as the term of your mortgage. The beneficiary is always the bank or the lender.

Who is eligible for life or mortgage insurance?

Almost everyone is eligible to get some form of life insurance. As long as you are honest and transparent with your history and background, you should have no problems.

Term life insurance

Term life insurance is an insurance product that is designed to provide coverage of financial responsibilities to your beneficiaries in the event something unfortunate happens to you. It is a life insurance product that provides coverage at a fixed rate for a specified time period. Upon expiration of this term, the client must either forgo their coverage or renew their term insurance life policy. If you were to die during the insured term, the death benefit will be paid to the beneficiary.

Term Life Insurance Features

1. There are many types of term-life insurance policies that range from 10, 20, and 30-year renewables.
2. Term to 100: Term life insurance policy that covers you up to 100 years of age.
3. It is the most affordable an common option for life insurance and is less expensive depending on the length of the term.
4. Renewability
5. At any point in time, the policyholder may switch between policies, regardless of the insured’s current state of health.

What is mortgage insurance?

Mortgage Life Insurance essentially covers the balance of your mortgage owing. It is also known as a decreasing term insurance as your coverage decreases as you pay down your mortgage. While your coverage decreases, your premiums stay the same. Your policy is valid for as long as the term of your mortgage. The beneficiary is always the bank or the lender.

What does Mortgage Insurance Cover?

1. Mortgage Insurance will help you cover the balance of your mortgage, should you become ill or die unexpectedly.
2. The beneficiary is always the bank or lender.
3. Only valid for the term of the mortgage. If you have a 5 year term mortgage, your mortgage insurance would have to be renewed every 5 years.

Mortgage Loan Insurance (CMHC)

Mortgage loan insurance is different than a mortgage life insurance. Lenders typically require mortgage loan insurance when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment. To obtain mortgage loan insurance, lenders pay an insurance premium. Typically, your lender will pass this cost on to you. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump

Permanent Life Insurance

Permanent life insurance is essentially an insurance policy that remains till the day of your death. There is a return of profit with term to 100 policies which can be used for paying future premiums, buying out policies all of which the dividends accumulated will earn interest.

Features of Permanent Life Insurance

1. Permanent Life insurance premiums are relatively more expensive when compared to a term life insurance policy. It is for this reason that it is advised to purchase a permanent life insurance policy when you are young to qualify for lower premiums.
2. Permanent life insurance policies earn dividends. (Dividends are not guaranteed since actual costs cannot be determined)
3. Permanent Life insurance has a guaranteed cash value. As you pay into your permanent life insurance policy, cash is accumulated upon which can be paid out if the policy is surrendered. You may also borrow money or take loans against your permanent life insurance policy.

Critical Illness

Critical Illness Insurance is a product that is designed to pay you a lump sum if you are diagnosed with a terminal illness that is clinically diagnosed. The financial impact from critical illness can be devastating. With this insurance product, you are free to spend the money to cover expenses such as :

1. Lost income
2. Private nursing
3. Special treatments
4. Medical equipment
5. Mortgage

Various Insurance companies will have different criteria’s on the what types of illnesses they will cover. These policies are attractive in a sense that if no claim is made, you are entitled to your money back. A critical illness can happen to anyone:

• It is estimated there are over 70,000 heart attacks in Canada each year.
• There are between 40,000 and 50,000 strokes in Canada each year.
• An estimated 3,075 Canadians will be diagnosed with cancer every week.

The following are general conditions that are typically covered by most critical insurance plans (Might differ based on insurance company):

• Alzheimer’s Disease
• Aortic Surgery
• Aplastic Anaemia
• Bacterial Meningitis
• Benign Brain Tumour
• Blindness
• Coma
• Coronary Artery Bypass Surgery
• Deafness
• Heart Attack
• Heart Valve Replacement
• Kidney Failure

• Life-Threatening Cancer
• Loss of Limbs
• Loss of Speech
• Major Organ Transplant on Waiting List
• Major Organ Transplant
• Motor Neuron Disease
• Multiple Sclerosis
• Occupational HIV Infection
• Paralysis
• Parkinson’s Disease
• Severe Burns
• Stroke

Disability Insurance

Disability insurance is an insurance product that is designed to provide you with financial security in the event an accident or an illness does not allow you to work and earn income. It allows you to meet your financial obligations and maintain your lifestyle should something happen. However your background and history would have to be squeaky clean. That means no neck pain; bad backs and you don’t climb Mt. Everest every weekend. The reason it is hard to claim disability insurance is because it is very difficult to diagnose problems and cures are stretched.