Life Insurance

It’s not pleasant to think of a life being cut short but it can happen, and if it does you want to see loved ones taken care of.  Life insurance can provide a lump sum, tax-free benefit to your family should something happen to you or a family member.  There are two main types of life insurance; permanent and term (ie temporary) which can be used on their own or in combination to meet your needs.  More specifically we can provide Term insurance (10, 20, 30 years), term 100, whole life and/or universal life insurance.  With life insurance you can cover yourself, your spouse, your child, a business partner or anyone whose passing would have a negative financial impact on you.

There are many reasons to consider purchasing life insurance:

  • To cover liabilities such as a mortgage, loan or line of credit
  • To provide replacement income for your family
  • To cover final expenses such as funeral, legal and accounting costs
  • To protect your beneficiaries from a large tax bill
  • To ensure care for a dependent or future child education costs

Life Insurance vs Mortgage Insurance

This is a topic which gets some attention in main stream media that is worth investigation.  Mortgage insurance is provided by the lending institution that your mortgage is with.  Generally you answer a short health questionnaire and coverage is provided on the spot.  However, you need to consider the following:

  • the cost is high as compared to life insurance of similar coverage amount
  • the mortgage insurance may be post-underwritten which means your health is investigated after your death and could result in the denial of your claim.
  • mortgage insurance only covers your mortgage, which means the coverage is always decreasing as you pay off your mortgage
  • the lending institution owns the policy and is the beneficiary so should you pass away your beneficiaries have no say in how the proceeds are used.

A few reasons to consider life insurance over mortgage insurance:

  • reasonable premiums for a policy that you own
  • your health is investigated (ie the policy is underwritten) up front allowing a quick lump sum payment to your beneficiaries, no questions asked
  • your beneficiaries decide how they want to use the proceeds
  • your coverage generally is static for the life of the policy

View the CBC Marketplace investigative report on mortgage insurance.