As term life insurance is the most commonly purchase type of life insurance in Canada, you may be wondering which life insurance company is best to purchase from.
We provide term life insurance quotes from the top life insurance companies in Canada but this yields many different companies with a variety of pricing to make this even more confusing.
The first step is to determine the amount of life insurance coverage you require and the length of the term policy you require (e.g. $1,000,000 20 year term life insurance policy). Then we would run the quotes for you and provide a rate comparison sheet which lists all of life insurance companies in Canada along with their pricing.
When deciding on a company we want to balance the features of the policy, strength of the company along with the price- essentially looking.
Not all life insurance companies are the same. Some life insurance companies are very large while some are small. Some companies are in a better financial condition than others as they have been in business for a longer period of time with consistent, high profits over many decades. The longer the term period the more important it is to consider what position the life insurance company is. You may want to apply with one of the larger life insurance companies who has been in business longer. Very similar to dealing with one of the big five banks in Canada. The possibility of these companies going bankrupt or being bought out is very low.
Find out if the premiums for the policy are fully guaranteed or not. Not all companies fully guarantee the cost of the premium for the entire length of the policy. Two policies could start with the same premium but if one policy does not have guaranteed premiums you could see the cost of the policy increase while you have the term policy. A term life insurance policy with guaranteed, level premiums for the duration of the term is preferred.
Most term life insurance policies have the ability to renew the policy beyond the initial length of the term. For example, if you purchased a 10 year term life insurance policy, most companies would allow you to continue your policy for another 10 years at a specified price. The benefit of renewing your policy is that there is no medical exam or health questionnaire required to renew your policy- just pay the new premium and away you go. The issue is that the renewal price can be quite high so you must be aware of what the renewal price is going to be after the initial term length and compare other companies.
Most term life insurance policies also have the ability to exchange (or convert) a term life insurance policy to a permanent life insurance policy (universal life and whole life) without having to complete a medical exam or health questionnaire. In the event that your health changes and you can no longer qualify for a new life insurance policy, you can exchange your term life insurance policy to a permanent plan to ensure that you have life insurance coverage for the rest of your life.
It is important that you purchase term life insurance with a company with multiple options for permanent life insurance products because some companies offer very limited options for permanent life insurance (with some having none).
Comparing Term Level Periods
There are many different lengths of term life insurance that can be purchased. You can purchase 10, 15, 20, 25, 30, 34 and even 40 year term life insurance. You need to determine how long you require the life insurance for before selecting the length of the term. A 10 year term life insurance may appear to be the most affordable today, but if you need insurance after 10 years then you will be paying a premium compared to buying a longer term length today (purchasing a 20 year term instead of a 10 year term). This is a conversation you should have with our licensed broker agents to help determine what term length is right for you.
It is very important to decide if you are going to be paying monthly or annually for your term life insurance policy. Many consumers in Canada pay for their term life insurance monthly. It actually costs less with most providers to pay annually instead of month. If you have the ability to pay once per year rather than monthly, you should compare the costs.
Every insurance company is different when it comes to underwriting a life insurance application. Some companies specialized in certain areas of health and lifestyles where as others do not. It is very important to discuss any previous and current medical conditions with your agent to determine which life insurance company will provide the best possible rate.
It is important to know that all life insurance companies to do define smoking in the exact same way. If are not a smoker and have never been a smoker then you will be applying for non smoking rates.
At the time of the application, if you are a smoker or have used tobacco products in the last 12 months you will be qualifying for smoking rates.
If you were a smoker in the past and have quit since then, there are other factors that would determine if you would receive smoker or non smoker rates. It depends on how long ago you were a smoker.
We highly recommend that you reach out to us to speak with a licensed broker to discuss the options available to you if you are considering purchasing a term life insurance policy. We have access to a wide range of providers and use our expertise to provide you with the right policy at the right cost.