Are You Eligible For Term Life Insurance
If youre a Canadian resident1, and fall within the age requirements for term life insurance, youre eligible to apply for Term 10, Term 20 and Term to 100 life insurance from TD.
A Canadian resident1 is any person who:
- is legally entitled to reside in Canada for at least the next year, and
- has been a resident in Canada for 183 of the past 365 days. Days do not need to be consecutive.
For Term 10 and Term to 100, the applicant must be between the ages of 18 years old and 6 months prior to their 70th birthday.
For Term 20, the applicant must be between the ages of 18 years old and 6 months prior to their 60th birthday1.
Some Quick Questions About How Life Insurance Might Affect You
Is a physical a deal breaker?
A trip to the doctors office can seem like the last thing you want to do right now, but you may not need to. It really depends on your age and coverage amount you are applying for, says Roy.Either way, youll likely still be asked a lot of health questions to figure out how big of a risk you are, about your habits, medical history and family medical history, so have that info ready and be mentally prepared.
What wont life insurance cover?
Some causes of death may affect your life insurance coverage. Death by suicide within the first two years of inception wont be covered by insurance, says Roy.
There might be other exclusions like extreme sports . Also, if you misrepresented yourself, thats a no-go, says Roy.
What happens if I decide to drop my life insurance policy?
It really depends on what type of coverage you have. For example, most term policies do not generate a cash value, so if they are cancelled the policy is voided, says Mitchell. However, with a whole life or universal life policy, there may be a cash value at the time of cancellation that would be paid out to the insured.
But, theres a catch: This cash value may be subject to a surrender penalty, which would be determined by how long the policy has been in force and the penalties listed in the policy.
Why Choose Canada Protection Plan Forno Medical & Simplified Issue Term Life Insurance
- Most of our plans offer full protection from day one.
- We offer both level and decreasing term plans.
- All level term plans are renewable and provide coverage to age 80.
- If you feel you need coverage beyond age 80, all level term plans are convertible to a permanent plan until age 70 regardless of your health at the time of conversion.
- Our plans include more free benefits than other life insurance providers.
- The level plans are available in 10, 20, 25 and 30 year term period versions. The premiums on these plans remain level for the selected term period and then are renewable for additional term periods. The plans are guaranteed to be renewable regardless of your health.
- The 25 year decreasing term plan can be an ideal way of protecting your family for your outstanding mortgage amount. Coverage lasts for 25 years.
- We take great pride in providing superior customer service from the day you apply until the day the claim is paid.
- Canada Protection Plan is Canadian owned and serviced by Canadians.
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Why Should I Shop For Life Insurance Online
You could get life insurance from the place where you bank or where you got your mortgage, but its worth shopping around for the best rates. Shopping online for the best life insurance companies allows you to compare products and rates. Take it a step further with an aggregator site, which pulls rates from various providers . It can be very easy and straightforward, depending on the website.
Mortgage Life Insurance Vs Mortgage Insurance: What’s Mandatory
Mortgage life insurance is not mandatory in Canada. You might still want to consider some form of life insurance, though, just in case you canât make your payments anymore.
That said, if your deposit is less than 20%, mortgage default insurance or CMHC insurance is mandatory. Mortgage default insurance is very different from mortgage life insurance, which helps cover payments for your new home . Mortgage default insurance protects your lender in the event you canât pay. This is so lenders can protect their cash flow.
Mortgage default insurance is issued by the Canada Mortgage and Housing Corporation . The lender pays the premium and then passes on the costs to you.
Confused? Watch this two minute video and let Marc explain how different types of mortgage insurance work.
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Home Insurance: Always A Good Idea
Even though for renters it isnât required by law, some landlords require their tenants to carry home insurance. Itâs a highly recommended form of coverage. For owners, anyone with a mortgage is usually required by their creditor to take out home insurance.
What can be covered by home insurance? Fire, theft, and vandalism, for starters, but also damage caused by high winds, hail, lightning, an explosion, or smoke, as well as leaky or overflowing water or sewage lines.
What Is Life Insurance
Life insurance is a contract to ensure that those who rely on you for financial supportsuch as a spouse or childrenwill receive money upon your death to help them pay for their needs.
That contract, called a life insurance policy, is made with an insurance company for a chosen amount of coverage that will be paid out, tax free, when the policy holder dies. The policy holder must pay a monthly fee, called a premium, to the insurance company for as long as the policy is in place.
The lump-sum life insurance payment thats issued upon death can be used by surviving family or other beneficiaries for any purpose. These include:
- Living expenses such as food, rent/mortgage, clothing, utilities, transportation, etc.
- Funeral costs and estate fees
- Taxes on assets, such as a home, cottage, or non-registered investments
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Is Mortgage Life Insurance Mandatory In Canada
You probably heard the pitch when you applied for your mortgage: add mortgage life insurance for just a few extra dollars on your monthly payment. Lenders want you to sign up for this service. But is it mandatory to have mortgage life insurance in Canada? Letâs explore.
Is mortgage life insurance mandatory in Canada?
Answer: no. Mortgage life insurance is not mandatory in Canada. It protects the bank’s loan to you, so if you die, your mortgage is paid. There are better options available to protect your family from financial ruin if you can’t make your mortgage payments. Any major life event is an excellent time to explore life insurance.
Do I Need Whole Life Insurance Coverage
Whole life insurance or permanent life insurance policies offer cash value and the opportunity for tax-free investing and payout. They can be very useful for wealthy people wanting to use the coverage for estate planning and to shelter their savings. They can contribute money into their insurance until they drop into a lower tax bracket amd are able to transfer more of their wealth to their families when they die by offsetting estate liabilities.
Theyre handy for regular income earners too. Whole life insurance can be used to cover the costs associated with death that cant be avoided such as funeral expenses. This is why people often convert from term life insurance to a permanent life insurance when they are older and their term is up for renewal.
While these permanent options might sound great its worth noting that 40 percent of permanent life insurance policies lapse within the first ten years. Unfortunately, some policyholders are unable to afford the high annual premiums it is important to choose the coverage you can afford.
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Employee’s Allowable Employment Expenses
Your employee may be able to claim certain employment expenses on their income tax and benefit return if, under the contract of employment, the employee had to pay for the expenses in question. This contract of employment does not have to be in writing but you and your employee have to agree to the terms and understand what is expected.
- You allow your employee to use his personal motor vehicle for business and pay him a monthly motor vehicle allowance to pay for the operating expenses and you include the allowance in the employee’s employment income as a taxable benefit or
- You have a formal telework arrangement with your employee that allows this employee to work at home. Your employee pays for the expenses of this work space on their own
You have to fill out and sign Form T2200, Declaration of Conditions of Employment, and give it to your employee so they can deduct employment expenses from their income. By signing the form, you are only certifying that the employee met the conditions of employment and had to pay for the expenses under their employment contract.
It is the employee’s responsibility to claim the expenses on their income tax and benefits return and to keep records to support the claim.
For more information on allowable employment expenses, see:
- Automobile and motor vehicle allowances and select Facts about automobile and other vehicle benefits and automobile allowances
Auto Insurance: Mandatory If You Drive
Auto insurance is required by law everywhere in Canada. It covers the owner and driver of a vehicle, as well as any passengers, pedestrians, and property involved in a vehicle accident.
Vehicle insurance is regulated by the provinces. In Quebec, any vehicle travelling on a public road has to be insured, explains Caroline PhÃ©mius, public relations advisor with theInsurance Bureau of Canada . IBC is the association that represents most Canadian property and casualty insurance companies.
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When Should I Get Life Insurance
While its common to think the timing is more about getting life insurance before your health starts to fade, the real sign that you may need life insurance is whom youre leaving behind. It is true that health can play a part in how much your premiums will cost , but deciding to get life insurance is about leaving money for your loved ones. Do you have dependents whose lifestyles would change should something happen to you? If yes, then the time to get coverage is now. Read: Do I really need life insurance?
Do I Really Need To Do A Health Exam To Get Life Insurance
Its up to you! No-medical life insurance is available in Canada. But it is worth knowing that these types of policies can cost more than ones that require a medical. But that said, its worth asking about how COVID-19 has affected testing, as youre going through the process. You may find out that the medical exam isnt as rigorous as you might expect. For more reading, check out this article: How does age affect life insurance rates? And to help yourself determine the questions you should ask when looking for life insurance, take this life insurance pop quiz.
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What Are The Different Types Of Permanent Life Insurance
The different types of permanent life insurance in Canada are: Whole Life, Limited-Pay Whole Life, Universal Life, and Term to 100. We explain the types of permanent life insurance in full below.
Whole life insurance and how it works
Youre covered until youre cremated and there is a cash value associated with your policy. Whole life insurance policies build cash value over time with guaranteed rates similar to a high-interest savings account or GIC.
In order to pay these guaranteed rates from the accrued cash value, your insurer will invest your premiums in a low-risk portfolio that you have no say in directing. Sometimes, whole life policies will also pay dividends based on the insurance companys profits. This is known as participating insurance. If you opt for a non-participating policy, it means you wont receive these dividends.
If you wish to surrender your whole life policy for the cash value at some point or borrow a loan against it, thats also an option. However, doing so will incur taxes or interest charges or both.
Limited-pay whole life insurance and how it works
Universal life insurance and how it works
The trade-off: a universal life insurance policy requires you to actively monitor the investment choices youve made with its cash value. Its kind of like opting to build your own investment portfolio versus paying into a mutual fund.
Term to 100 life insurance and how it works
What Term Life Insurance Coverage Is Right For You
Term Life Insurance can provide coverage for 10 years, 20 years or for life depending on your needs. For example, a 35 year-old non-smoking female can get $400,000 of coverage for as low as $20.00 per month2. Whichever TD Term Life Insurance plan you choose, enjoy features like:
- Coverage up to $10 million.
- A guaranteed monthly or annual cost over the entire length of the term3, which is great when it comes to budgeting your money.
- Automatic renewal for 10 and 20 year plans at the end of the term without medical questions or exams until you turn 80, at which point your coverage ends4.
- The option to convert 10 or 20 year plans to permanent coverage any time before age 69.
- Preferred rates available for 10 and 20 year plans5.
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Critical Illness Insurance On Credit Or Loans
This type of insurance can help to pay off or pay down the remaining balance on your credit or loan if you’re diagnosed with one of the critical illnesses specified in your certificate of insurance.
Your certificate of insurance provides a list of the illnesses that are covered.
Pre-existing illnesses and medical conditions are usually not covered. However, some insurance will pay benefits if you’ve been free of the illness or medical condition for a period of time. This will be defined in the terms and conditions in your certificate of insurance.
Is Mortgage Life Insurance Worth It
Thereâs more to life than paying your mortgage.
Mortgage life insurance can be costly. That’s why a term life insurance policy is the smarter option, because itâs budget-friendly and it puts the various financial needs of your loved ones first. Weâve already shown how it saves you money, now letâs count the ways term life insurance works even harder for your family:
- You own a term insurance policy, so you decide who the beneficiary is. With mortgage insurance, the lender is always the beneficiary.
- It covers more than your mortgage debt from paying off loans to covering unexpected funeral costs and helping your partner maintain the lifestyle you worked so hard to achieve.
- Term life insurance premiums stay the same for the length of your term which can be as long as 20 or 30 years. Mortgage insurance premiums, on the other hand, renew with every new mortgage term. Premiums increase as age .
- Your policy isnât tied to your lender. In a nutshell, this means your insurance will pay off your mortgage regardless of who your lender is.
- Your death benefit never loses its value for the length of your policyâs term.
When comparing policies, think of it as a battle royale between the constant coverage of term life insurance and decreasing coverage of mortgage life insurance. The charts below compare the two .
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All Drivers Must Have Car Insurance In Canada
Scotiabank makes financing a car as a newcomer easy and affordable, and with car insurance, youll be protected in the unfortunate event of a car accident or vandalism. If you own a vehicle in Canada, youre required to have car insurance, and rates vary by area, insurer, and driver.
If possible, research insurance options before car shopping, since cars with better ratings are less expensive to insure. You can check a cars rating through the Insurance Bureau of Canada. Keeping your will also reduce the cost of your insurance policy in some areas.
It might be tempting to select the cheapest mandatory insurance coverage you can find. For most areas in Canada, the minimum requirement for liability insurance is $200,000, but $2 million of coverage is a safer choice. Take into consideration how costly an accident would be if youre at fault. Not only will you need enough insurance to cover the other persons vehicle repair and health costs, but youll also be responsible for any property damage the accident caused. If the cost of the losses or damage is more than your liability limit, youll need to pay the balance of the settlement yourself, and that can be a substantial amount of money.
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You Can Get Life Insurance That’s Right For You By Following These Tips Today
Buying life insurance for the first time is a big decision. Finding coverage thats right for you can help take care of your loved ones if youre no longer there.
Life insurance is essential at any age and there are key advantages to starting early.
You can use these helpful tips today to make the process easier.
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Why Does Anyone Get Mortgage Protection Insurance Then
Many homebuyers, especially those buying their first home, havent done enough research to know what theyre getting into, said Thomas.
When the bank proposes adding mortgage protection insurance, for most people, its a five-second decision.
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Banking and mortgage industry professionals are often under enormous pressure to sell mortgage insurance, and benefit handsomely through commissions when they do, said Heath.
Your friendly neighbourhood banker is financially motivated to get you to buy mortgage insurance, whether its in your best interest or not, he added.
That may be why, a few years back, Heath himself discovered in his first-ever mortgage statement that he was, in fact, paying for mortgage protection insurance even if he had clearly declined coverage.
Heath eventually got his lender to cancel the policy and refund the premiums.
But many homebuyers arent well-informed enough to know they shouldnt have signed up for the service in the first place.