If you recently bought a house, had a child or started looking after an aging parent, you may wonder if it’s time to buy life insurance. Or, if it’s about, what is life insurance?
Life insurance aims to protect your family if you die and your income disappears. Of course, you do not want them to fight financially, if unthinkable to happen, so life insurance is an ideal solution.
There is only one problem, you probably pay more bills than ever in your life at this time, so think about adding another monthly cost to the budget can give a serious headache.
The good news is that there is a kind of insurance that gives the family financial protection, which they need without breaking the bank: timely life insurance.
In this article I explain what life insurance is, who should buy it, how much it costs and how to get protection.
What is life insurance?
So what is terminal life insurance? A term life insurance policy protects the family financially for a specified time. 10, 20 and 30 years are the most common length of the deadline. You choose the amount you want to be covered for, and the number of years you want to last after buying a policy.
If you die, when your policy is active, your beneficiary will receive a death benefit without tax, which are equal to policy insurance amounts. So if the insurance amount is USD 500,000 and you die while you have a policy, your beneficiary will receive a flat -rate payment of USD 500,000 without tax. If you die after the policy expires, the insurer will not pay anything, so you want to make sure you have the right insurance.
After purchasing a timely insurance, the premium and the amount of insurance will be closed for the entire period of the policy. This means that even if you develop a serious health or become an avid diving diver during the policy date, you will not have to pay more in contributions.
What is the difference between the date and life insurance?
Now you know what life insurance is, but what about life insurance? All life insurance is a kind of permanent life insurance. This means that constant policy lasts for the rest of his life. And your insurer will have to cough money to pay the benefit of death when you die (regardless of when it will happen).
All life insurance may seem tempting because it protects your family for the rest of your life and covers the value in cash. However, because at some point your insurer will definitely have to pay the benefit of death, all life insurance policies are much more expensive than life insurance policies. If you don’t really need coverage for the rest of your life, which many people do not have, you will spend the years at the insurer’s pocket for no reason.
Instead of getting a permanent life policy, most people go with life insurance and invest the difference. Here is a detailed division of these two.
Life insurance date vs universal life
Universal life insurance is another type of life insurance policy. Like life insurance, you can borrow the value of your policy. The biggest difference is that common life insurance policies are more flexible when it comes to death premiums and benefits.
When you compare timely life insurance with Universal Life Insurance, these are basically two different products. Life insurance covers you for a certain time, while common life policies are a permanent insurance policy. Your life insurance rates will most likely be more related to universal life, as opposed to timely life.
What happens when the insurance life insurance passes?
We mentioned that life insurance lasts for a long time chosen when buying a policy. At some point it expires like milk sitting in the fridge (just not so fast). But what exactly happens when the policy date ends?
When your life insurance policy is similar to expiry, you will have two options: you can let it expire or renew them. You can allow your policy to expire, if you no longer need coverage or if it is more meaningful to obtain insurance by applying for new rules. For comparison, you can decide to renew the policy if your family still needs financial protection and sticking to the same policy seems to be the best plant.
It should be remembered that if you renew your policy, you’ll probably pay a higher rate for it. Finally, when you renew your rules, you will be older than you were when you bought it. Because being older makes you more risky, your insurance company will compensate for this higher risk by downloading more insurance. Unfortunately, there is no discount on life insurance!
Who should get terminal life insurance?
Term insurance can be suitable for you if you need protection only for a certain number of years, for example when you have children depending on financial or mortgage. Since you can choose your period of policy when purchasing insurance for timely life, you can pay for protection only in the years in which your family would be able to die.
In the case of life insurance, there is a chance that you will die while maintaining the policy and the insurer will have to pay. As a result, term life insurance is attractive for people who are looking for “cheap” insurance.
Even if you know that all life insurance is the right choice for you, obtaining life insurance can be a good temporary solution. Most of the timely life policies can be transformed into a whole policy of life on the road. So you can always start with insurance for time and transform them into all life insurance, when your wallet still does not bleed from the advance that you just placed at home.
What insurance amount and the policy date should you choose?
The amount of insurance and the length of the policy, which is suitable for your family, depends on your needs and financial obligations. In general, most people buy a policy covering expenses that they would pay to support their family until their mortgage is repaid and their children are not outside. For example, my wife and I received $ 500.00 with a period of 20 years.
However, if you have a child with special needs or you want to help you support your parent’s aging in long -term care, you may need policy with a higher payment and long -term length
How much does life insurance cost?
The amount you can expect to pay for insurance life insurance depends on several key factors. These factors determine how much your insurer would have to pay if you died or how likely it is that you will die while you have a politics. In other words, they tell the insurer how risky for them and how likely it is that they would have to pay your policy.
These are key factors that determine how much your monthly contributions cost:
- Coverage amount: The more you want to be covered, the higher your contributions will be.
- Policy length: The longer you want, the higher your contributions will be.
- Age: You will pay higher contributions if you apply for a policy when you are older and younger.
- Sex: If you are a man, you will probably die earlier compared to a woman. As a result, men will pay higher contributions.
- Health: You will pay higher contributions if you have a health condition that increases the risk of early death.
- Smoking status: Smokers pay higher contributions than non -smokers.
For example, if you are a healthy non -smoking, the $ 200,000 rule can cost USD 24.77/month if you are 35 years old when you buy a policy. However, the same policy can cost $ 55.20/month if you are 45 when you buy it. It’s more than twice as much as the price!
What is the best life insurance company?
It cannot be said that one life insurance company is better than the other, because there are many insurers in Canada who offer excellent life insurance policies. To say, there are several things where you should focus when you are considering a life insurance policy from a specific company.
Financial health
You want to know that if you die at any time, your insurer will still be nearby to pay death. Fortunately, the insurance industry is strictly regulated in Canada. As a result, most insurance companies are very financially stable, so you don’t have to worry too much about choosing an insurer who will end secretly.
E-oplications
Application for paper life insurance may increase the processing time of application by a amazing 6-8 weeks. Therefore, choosing an insurer who accepts E applications can be a good idea
Price
It is natural to think that if one insurer offers a lower rate for politics than everyone else, they must have something sketchy. The reality is that a lower price usually simply means that a more competitive company is a policy valuation to convince you as a customer. There is nothing wrong with the insurer with the lowest rates.
If you want to learn more about the best Canadian life insurance companies, Policeme has reviews For more information.
How to buy timely life insurance?
If you are already stretched thin, you can worry that buying life insurance will be a complicated process that you don’t have time for. But in fact getting coverage is usually easier than you think.
Here’s how this process works:
- You get quotes for politics from an insurer or an independent broker
- Choose a valuation and fill out the application
- Your insurer collects information about your health and lifestyle (medical exams may be required)
- You are approved for the policy