Many people consider the cost of life insurance the most important factor when deciding on a policy. To accurately answer this question, it is important to first understand that “life insurance” covers a broad range of products. In its most basic form life insurance is designed to protect an individual’s wage if they were to die. For someone who is the sole breadwinner of a family, it can be reassuring for them to know that even if the worst were to happen, those they provide for would not experience significant financial hardship due to this loss of income. The death benefits are used to pay off significant investments, such as mortgages, or to ensure that a child’s education savings fund continues to grow.
Term life insurance is the most basic form of life insurance, and is designed to give you coverage over a set number of years. An insurance broker will look at how much and how long you need coverage for, plus other factors like your age and relative health. Based on this information, a broker can compare the polices offered by different insurance providers, and give you a personalized quote. Due to so many factors the price of premiums can range anywhere from 25 dollars a month, to a few hundred. For example, a healthy 40 year old man looking for a term policy of 20 years with coverage of $500,000 may pay a fixed annual premium of only $350 a year. If that same individual were to wait 10 years and were still healthy, those premiums would jump to around $1,000. At 60, that individual would be looking to pay about $3,000 a year.
Whole life insurance polices, differ in that in addition to providing coverage they also have a built in savings component. Another difference, is that these types of polices never expire, which guarantees you are covered for your entire life. The savings are referred to as cash value, and they can make a significant difference in the premiums you pay. If the same healthy 40 year old man was looking for the same death benefit of $500,000 but opted instead for a whole life policy, he could expect to pay around $3,000 a year. This may seem significant, but since that cash value remains yours, you are actually benefit by saving money for the future.
Since there are so many factors that go into the price of life insurance, your best option is discussing your needs with a professional. Independent life insurance advisors can help you get the best coverage by comparing quotes from different companies. LifeCover.ca specializes in connecting Canadians with certified life insurance professionals. We can help you get the coverage you need, at a price you deserve.