Buy Cheap Life Insurance in Canada

5 Tips to Find Cheap Life Insurance

Through the economic recession many Canadians had to give up a lot of things. People have given up entertainment, retirement savings, paying off debts, and even their life insurance. For many, as their assets such as RRSP investments and home values have fallen there is even less financial safety net for the family to live on if the home’s bread-winner were to pass away.

Life insurance ownership has dropped to a 50 year low as of a study conducted by LIMRA (a life insurance industry research organization) in August 2010. According to the study, 44% of American households have no personally owned l life insurance and 30% have no life insurance whatsoever.  These statistics are very dangerous for the surviving families, especially those with young children. In the US, of families with children under age 18, 11 million have no life insurance at all.

So, what is the solution? How can families on a very tight budget afford the life insurance they need? Looking at term life insurance is probably your least expensive alternative to get cheap life insurance. The cost for term life insurance has been coming down in Canada for the last decade and has reach all time lows. All the major life insurance companies continue to be in a pricing war for the term life insurance market, which could benefit you finding cheap life insurance.

Buy Term Life Insurance

Looking at a term life insurance policy vs. a permanent life insurance plan (usually called whole life or universal life insurance) could save you thousands of dollars. Term insurance is designed to have a level premium for 10, 20 or even 30 years. After that time the premium of the policy does increase dramatically, but will you still need the insurance at that time? If so most term life insurance policies can be converted into permanent life insurance before age 70, giving you the option to change the purpose of your insurance in the future when your needs and economic situation changes.

Here is an example of how cheap term life insurance has become in Canada. For a man aged 40 who does not smoke, he could get $500,000 of term life insurance for as little as $23.85 per month with a price locked in for 10 years or $39.51 if he was to lock in rates for 20 years. Most people can afford these cheap life insurance premiums, even on a very tight monthly budget.

As long as you pay your premium the insurance company can not take you policy away from you, and they can not increase your premiums during your term. These cheap term life insurance plans can also be converted into permanent life insurance if your needs were to change in the future (you can convert the full $500,000 or a smaller portion of the coverage).

Buy insurance when you are young and healthy

When considering buying life insurance you have to look at your health as well as your budget. It has been said that money does not buy life insurance, health does. If you have become unhealthy, it might not matter how much money you are willing to pay for the policy, a life insurance company might not sell it to you for any reason. The good news is that if you own a life insurance policy, the insurance company can not take it away from you, no matter how your health might change in the future. You are also guaranteed to convert a cheap term life insurance policy into permanent life insurance without providing medical evidence again.

The cost of life insurance begins to increase about 4-5% per years as you age. For someone in their 30s the cost can be very low, but as you get older, and logically closer to death, the cost increases. It is also more common to have minor health problems, like high cholesterol or blood pressure, as you age. Even if these conditions are under control, you may no longer qualify for the insurance company’s best rates.

Pay your life insurance premiums annually

The cost of life insurance should be analyzed for monthly payments vs. annual. Most insurance companies charge a “modal factor” on month payment plans. What they are actually doing is advancing you the entire annual premium for protection and then charging a high interest rate and administration fee on top of the base premium. This usually works out to one month’s extra premium compared to paying annually. Think of a $50 per month premium for 20 years. If you could save $50 per year (one month’s premium) by paying annually, you will save $1,000 over the life of the contract, for exactly the same policy and benefits.

Shop around for cheap life insurance with a broker

When looking for a cheap life insurance rate, you can find the best policy with an insurance broker. As an example, the two premiums quoted above were with BMO Insurance for the ten year term policy and RBC Insurance for the 20 year term plan. Only a life insurance broker can find you the best rates. If you are shopping for a cheap life insurance policy, a broker like one at Life Guard Insurance, offering policies with all of Canada’s major insurance companies, will find you the best deal. Feel free to have a look for yourself. Go to our online instant life insurance quote center and run the numbers for yourself. Without having the pressure of a sales person visiting, you can see which life insurance policy will be best priced for you.

Don’t assume your group insurance plan will be cheaper

For many Canadians, their group insurance plan through work offers them the ability to add additional life insurance through an optional top up. Most people assume this is the lowest cost way to get additional life insurance. It might be cheaper, if you are young, but quite often it is more expensive than buying your own personally owned life insurance. As you age, a group life insurance plan goes up in price every 5 years (like age 35 – 39, 40 – 44, 45 – 49, etc.). What starts out as a low cost policy can increase over time and cost you a small fortune.

Another thing to consider is that group life insurance is not yours, but is a policy owned by your employer. You are only eligible to be insured by the plan so long as you are an employee. If you leave your life insurance coverage terminates immediately, and you could be left with nothing!

So, if you are looking for ways to save money on your current life insurance plan, or need to get a new cheap life insurance policy, please feel free to contact us here at Life Guard Insurance. We can shop the entire Canadian life insurance marketplace for you, find you cheap life insurance to meet your needs at the lowest price you need to pay.

The article was written by Mitch Reynolds+. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about buying cheap life insurance would also be very much appreciated.

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