All You Need To Know About Life Insurance In Canada

August 23, 2019

All You Need To Know About Life Insurance In Canada

Many Canadians wonder whether or not they should sign up for a life insurance plan. You may be familiar with insuring your valuable assets like your home or car against potential damage or loss. It’s not advisable to overlook insurance protection for yourself. While people are less likely to die a premature death, it’s critical for you to avoid financial risks you might leave behind. It’s time to understand how life insurance can protect the financial well being of your family.

How life insurance works

Life insurance is a policy, a contract between you and the insurance provider that will pay a tax-free, lump-sum amount to your beneficiaries or people you choose upon your death. For example, if you buy a $500,000 insurance policy, your beneficiary will get this amount upon your death. In exchange, you agree to pay premiums over time.

Several factors determine the cost of life insurance: the type of policy, age, smoker status, health, the amount of death benefit, etc. An insurance company can request you to undergo a medical examination before they accept your application.

Why life insurance is important

Life insurance is an effective way to meet several financial objectives. For example:

  • Childcare and education which includes ongoing costs
  • Funeral and estate expenses including probate and executor fees
  • Coverage of capital gain taxes due at death
  • Payments of debts
  • Income replacement to help your family meet financial needs

Another question is to determine how much coverage you should have. It depends on your individual situation. How much do you need to pay off your debts? How much will your family need to maintain their lifestyle? Financial circumstances vary from person to person. So, it totally depends on your unique situation.

Main categories of life insurance

Term insurance and permanent insurance are the two main categories of life insurance. While permanent insurance provides protection for your lifetime, term insurance ensures protection for a specific time period. We can further divide permanent insurance into three types: universal, whole life, and term to 100 insurance.

Universal life insurance not only ensures death benefits but also offers greater flexibility in terms of the size of premiums. When an insurance holder dies, their beneficiaries get the entire policy value. In whole life permanent insurance, the premiums you pay are fixed and can sometimes be high.

A good way to start analyzing your life insurance needs is to consult a financial advisor. This will help you find out the right life insurance policy and how much coverage you need and for how long. A number of companies provide life insurance in Canada. For instance, Canada Protection Plan is a leading service provider of life insurance.

If you’re not sure what type of insurance would be ideal for you, contact one of our financial advisors at Kewcorp. The process to buy life insurance should be simple and straightforward. For all your life insurance needs, please contact Kewcorp Financial at 780-449-6292 or click here

Did you know?

According to the Canadian Health and Life Insurance Association, 22 million Canadians, or 60% of the population, owned $4.7 trillion in life insurance coverage. Make sure you also have enough life insurance.
Click here for more information.


Jim Kew

Financial Planner
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Scott Kew

Financial Planner
Contact Scott