Live generously with life insurance

A life insurance policy is a contract between you and an insurance company that guarantees your beneficiaries (i.e., the individuals and groups who will receive your life insurance payout) a lump sum payment upon your death. It can’t be cancelled as long as you pay the monthly or annual premiums (i.e., the amount you pay for an insurance policy) in full and on time. Finding the best life insurance in Canada is easier when you work with an experienced advisor who knows how to match your needs with the right kind of coverage.

You can expect your life insurance needs to change over the course of your life. There are rules of thumb and calculators to help you figure that out. The amount of coverage you need should be enough to help your beneficiaries (i.e., the individuals and groups who will receive your life insurance payout) carry on without financial stress.

As you begin to explore life insurance plans, there are two ways to estimate how much coverage you need.

Salary: Estimate six to 10 years of your current salary. For example, if you earn $80,000 a year after tax, you would need $80,000 X 6 = $480,000 or $80,000 X 10 = $800,000.

Years to retirement: Estimate the number of working years between now and retirement. That’s the income you need to replace with a life insurance policy. Income = $80,000. Years to retirement = 8. You should estimate needing $80,000 x 8 years = $640,000.

These are only rules of thumb. Your income, expenses and lifestyle all need to be carefully evaluated before you move from estimating your needs to purchasing a life insurance plan.

For a better understanding of your needs, get a free quote or contact us today!

The cost of life insurance is based on a handful of factors, such as your age, health, and the amount of coverage you want to purchase. It will also depend on whether you’ve chosen term life or permanent life coverage.

The chart below compares how premiums are paid for both term and whole insurance policies.

An insurance advisor can help you decide between term and permanent life insurance options based on your financial goals and your budget. Here’s how the cost of life insurance premiums compare for two women, both 30-year-old non-smokers.

*Premiums calculated based on current non-rated illustrations, as of June 2023

As you can see, there’s more to the life insurance equation than just age and budget. Always seek advice before you decide what’s right for you and your family.

Life insurance offers a host of benefits, and can be personalized to play a number of roles in a family’s financial plan. Here are the top three ways life insurance pays off for Canadians:

• Asset protection – Your family won’t have to sell your home or cash in other investments if something happens to you.
• Continuation of financial goals – Money from a life insurance policy can pay for all kinds of life’s goals, such as retirement and your kids’ education.
• Freedom to enjoy life now – Knowing that your family and legacy are protected, you can spend a little more money today on living life and contributing to your community.

Personalize a life insurance plan that meets all of your needs with the help of an experienced insurance expert.

Life insurance benefits go directly to your beneficiaries, tax free. That means they can spend your entire gift any way they choose. This is a unique advantage because passing on other assets, such as a family cottage or investments, could result in a tax bill for your heirs. And if you purchase life insurance through a group policy, you may be able to pay with pre-tax dollars, making premiums even more affordable.

The beneficiary of a life insurance policy is the person who will ”benefit” from the coverage because they receive the lump sum payment from the insurance company. Pretty straightforward. You can choose to name more than one beneficiary. You can even list any charities you would like help financially, or co-borrowers who may inherit some of your debt. It’s important to designate someone who will see that your wishes are respected.

A life insurance payout is the lump sum paid to your beneficiaries (i.e., the individuals and groups who will receive your life insurance benefits). In the case of term life insurance, the payout is a lump sum. In the case of whole life insurance, your beneficiaries receive a guaranteed lump-sum payout plus the value of the cash portion that has accumulated on your behalf. Whole life policyholders also have access to the cash portion of their coverage throughout their lifetimes to help with emergencies, post-secondary education expenses, or the cost of retirement living.

The two most common forms of Life Insurance are ”term” and ”permanent.”

• Term life insurance is purchased for specific lengths of time (the term). This lets you match your coverage to your needs and gives you the option of renewing at the end of each term.
• Permanent life insurance is coverage that’s locked in for life and can never expire once all of the premiums have been paid.

A lot goes into choosing the right kind of coverage. Let Serenia Life’s insurance experts help you make the right call by factoring in all of the other moving parts in your financial plan and your hopes for the future.

Whether you buy life insurance online or work with an advisor, here are some common life insurance terms you’re going to encounter:

Coverage – This is the amount of money your beneficiaries will receive. The higher the coverage, the more you will pay in premiums.

Beneficiaries – The people who will receive your financial gift. You can designate a combination of people, charitable groups, or organizations.

Maturity date – This is the exact date when your insurance coverage will end. The policy tenure (see below) expires on this day.

Policy tenure – Similar to the word ”term,” this refers to how long the insurance company will provide coverage, assuming you keep up with payments.

Premiums – The monthly or annual payments you make to keep your life insurance policy in effect.

Pre-existing conditions – A pre-existing medical condition is anything that has already happened to you that could have an impact on your length and quality of life. If an insurer feels this will increase the risk of early death, you may have to pay extra for coverage.

Riders – When your life insurance policy is purchased, or when it renews, you can often add (and pay for) additional coverage for events like accidents or critical illness.

Term life insurance – Life insurance that expires at the end of a period of time called ”the term.”

Permanent life insurance – Life insurance that never expires unless you fail to make payments or decide to cancel it.

Whole life insurance – A type of permanent life insurance offered by many insurance providers in Canada.

The most important step in purchasing life insurance is choosing a provider who will always be close at hand to answer your questions, help you choose the right coverage, and let you know when it’s time to revise your plan.

3 steps to buying life insurance

1. Make a list of the people you want to benefit from your policy, and how the money will affect them. This will help when it comes time to estimate the amount of coverage you need.
2. Write down your current income and expenses so you can estimate how much you can afford to spend on life insurance and where the money will come from.
3. Be ready to talk about pre-existing medical conditions that might result in you needing a medical examination in order to qualify for coverage.

A Serenia Life advisor will take care of the details and use this information to start building your personalized insurance plan. Get started by calling 1-866-616-3996.

The short answer? Everyone. Life insurance is often the bedrock of a financial plan because almost everyone can benefit from coverage at some stage in their lives. Young adults, new parents, professionals, even retired Canadians use insurance to protect their income and their assets.

Getting even a small amount of coverage when you are young can help you qualify for larger amounts later. Premiums (i.e., the amount you pay for an insurance policy) are typically more affordable when you start early, too.

Life insurance provides a lump sum cash payout that your beneficiaries can use any way they want. They might pay off a mortgage or invest a portion of the money to create a source of income. The point is that they’ll have money they can use to keep their lives on track. Without a life insurance plan, your financial commitments could easily become someone else’s burden. For example, professionals with large student loans that are not guaranteed by the government could saddle their surviving partner with the payments.