Nowadays, the economic climate is very uncertain, buying insurance is smart. Plus it’s one of the best financial moves for people who want their family to be financially secure even after they die. Sadly, however, many people having insurance are underinsured, putting their family at risk. On the other side, many people are also over-insured, paying for insurance amounts that they don’t really need.
Finding the right balance while buying the best policy for you and your family is a confusing and challenging task. So, whenever you are going to buy life insurance, make sure about consulting with an insurance agent, and know about the details. That being said, having a chat with a policy representative is the best way to teach yourself the basics of insurance policies.
Here are a few essential facts that you should know about life insurance in Canada:
How long should the plan holder insure?
The insurance policy length depends on the reason for taking a policy. The reason could be you need a policy in order to have an income source post-retirement. Or you can opt for insurance if you want safety during emergencies. For instance, during a medical emergency, there won’t be a burden on your family to arrange money for your treatment.
As said earlier, another reason to have a policy is to keep your loved ones financially secured even after your death. According to your needs, an insurance agent will help determine the length of your policy cover.
Most companies do insure their customers for at least two years, but most people go for 20-25 years of length. There are very few companies that insure people over 70, plus they charge costly premiums for that.
How much should be your coverage.
Charges for your coverage are generally based on your income. The general rule that is mostly followed by most people is to take out a policy that is worth 7 or 10 times your income. Also, keep in mind the amount of coverage; you should be able to fulfil your family needs. Additionally, you should even know that your coverage can’t be an income source for your family. It will only come in handy in an emergency and for a few months.
Also, consider the future expenses that your family may have to face. For instance, if you die, your family may have to pay medical/funeral costs. Or you have taken some loan, so you would want your family not to have the burden to pay off the loan. So you should choose your policy coverage according to your current needs as well as possible future needs of your family. Ensure that you don’t pay for more coverage than you need. Go for a policy that will provide you with all the necessary coverage that you might need at the essential time.
What’s the right time to buy an insurance policy?
When people are young, they are mostly at the peak of their health, and that is the best time to buy health insurance. So, it’s best for you to buy a policy at a young age, but don’t buy it if you’re still dependent on someone for your daily needs. The premium amount you’ll be paying will depend on your medical exam, records, your age, your family’s medical history, and some other factors.
However, as said above if you have a pre-existing condition or you’re old, your insurance premium will be quite expensive. The medical industry has become so advanced; that many serious conditions also have now become more manageable. With new technology, the treatment is more costly and not everyone can afford it. This is the time where an insurance policy comes to play because a company pays for treatment in exchange for monthly premiums. People with pre-existing conditions can shop around to see which firm offers them the best insurance quote.
What life insurance policy do you need?
There are many types of policies available according to the different situations and needs. Though, the most common types of policies are term and permanent insurance.
Term Life insurance: This type of policy provides coverage for a set period. It can only give coverage until a specific age, for instance, 75, 80, or 90. It’s the most affordable and preferred by young individuals. This policy can also be changed into a permanent policy.
This policy has guaranteed renewability, but the premium keeps on increasing with each renewal. Most companies offer term life policies that allow coverage up until the age of 90. So, if you die while the policy is in force, your family or beneficiary is guaranteed an amount of coverage that you’re entitled to in your life policy.
Permanent insurance: This policy gives protection for your whole life. You’ll be guaranteed to get an amount of money during emergency situations. For instance, if there’re some excessive medical expenses or when you die, your family will get enough cash according to the total policy coverage.
No medical life insurance: This type of policy has been trending lately among older people or people with pre-existing medical conditions. According to https://shelterbay.ca/no-medical-life-insurance/, in no medical life insurance you don’t need to take any medical test in order to opt for the policy. If you’re over 65 or have a pre-existing medical condition, then choosing for this kind of medical policy is best.
Most people are opting for an insurance policy because it helps secure life against financial crunch during urgent times. Moreover, an insurance policy can help curb future financial needs as well. For example, an insurance policy in place can ensure retirement expenses are taken care of, regardless of the replacement for regular source of income.
In short, securing financial, as well as, social future for you and your family should be on top of your to-do list. And including an insurance cover must be integral to this priority list. That being said, with the help of the aforementioned tips you can hopefully, find better protection for your family.
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