Insurance is a contract where you pay a monthly or yearly premium and the insurer covers certain financial losses e.g. accidents, damage, death.
No. In Canada, payouts are generally tax-free to beneficiaries.
Your chosen beneficiary (spouse, children, etc.).
A policy with:
- No medical exam
- A short health questionnaire
- No waiting period
Approval is quick, and premiums are lower than guaranteed issue (because some health screening is done).
A policy where:
- No medical exam
- Minimal health questions
- Approval is guaranteed
- usually 2-year waiting period
Anyone within the eligible range is accepted.
Covers you for a specific period ("term") such as 10, 20, or 30 years.
If you pass away during that term, your beneficiary receives a payout.
- The policy expires.
- No payout is made.
- You can possibly renew, but at a quite higher cost.
- Only covers a fixed time period.
- There's no cash value or investment component.
Depends on:
- Age
- Health
- Smoking status
- Coverage amount
- Term length
Costs rise significantly with age.
Yes, based on:
- Health conditions
- Risky lifestyle
- Medical history
Yes. It increases only if you renew after the term ends.
Yes (in most cases, check your contract):
- No medical exam required at renewal.
- Premiums increase based on age.
You can convert your term policy into permanent insurance without a medical exam, before a certain age.
Best for people who want to protect:
- Family income
- Mortgage and rent obligations
- Children's future expenses like daycare and education
Match it with your responsibilities:
- Mortgage length
- Until children are financially independent
You may use this insurance needs calculator: https://claude.ai/public/artifacts/36df2ae2-ca46-4561-bbe3-d3198c350587
To know more, do not hesitate to reach out!
- Covers you for life (no expiry).
- Pays a tax-free benefit when you pass away.
- Includes a cash value (savings component).
A type of permanent life insurance which is a policy that is structured:
- Fixed premiums.
- Guaranteed cash value growth.
- Potential dividends.
- Usually higher premiums (for guarantees) than universal life insurance.
- Managed by the insurance company.
A type of permanent life insurance with a policy that is flexible and investment linked:
- adjustable premiums (within limits)
- you choose how to invest the cash value
- returns depends on market performance
A portion of your premium builds savings inside the policy that:
- grows over time
- can be borrowed against or withdrawn
Growth inside the policy is generally tax-sheltered in Canada (within limits).
Absolutely, yes! Policy loans or withdrawals (may reduce death benefit) are allowed.
- Wants predictability
- Long-term estate planning
- Doesn't want to manage investments
- Comfortable with investment decisions
- Wants flexibility in payments
- Higher income earners using it for tax planning
Whole life - may use cash value to keep policy active for a time.
Universal life - risk of policy lapse if there's not enough value to cover costs
PREMIUM - The amount you pay to keep your insurance active.
POLICY - The contract between you and the insurance company that explains what's covered and what's not.
COVERAGE - What the insurance actually protects e.g. car, home, life.
INSURER - The company that provides the insurance.
POLICYHOLDER - The person who owns and pays for the insurance policy.
DEDUCTIBLE - The amount you pay out of pocket before insurance pays the rest.
COVERAGE LIMIT - The maximum amount the insurer will pay for a claim.
RIDER - An add-on to you policy that gives extra coverage.
CLAIM - A request to make to your insurer to get paid for a loss.
BENEFICIARY - The person who receives money from a life insurance policy when you pass away.
PAYOUT - The money the insurer pays after a valid claim.
EXCLUSION - Things your policy does not cover.
WAITING PERIOD - A period at the start of a policy when full coverage may not apply.
TERM - The length of time a policy lasts e.g. 10 or 20 years
PERMANENT INSURANCE - Coverage that lasts your entire life e.g. whole life or universal life.
CASH VALUE - Savings that build up inside some life insurance policies over time.
DEATH BENEFIT - The money paid to your beneficiary when you pass away.
UNDERWRITING - The process insurers use to assess your risk (health, lifestyle, etc.) and decide your price.
RENEWAL - Extending your policy after it ends (usually at a higher price).
CANCELLATION - Ending your policy before its term is over (not advisable).
LAPSE - When your policy end because you stopped paying premiums.
GRACE PERIOD - Extra time (usually 30 days) to make a late payment before the policy lapses.
RISK - The likelihood that something bad (like an accident) will happen.
CLAIMS HISTORY - Your past claims record -- used to determine your premiums.
HIGH-RISK - Someone more likely to make a claim (usually pays higher premiums).