*** This life insurance post is sponsored by GoLife.ca ***
Life insurance and mortgages can be a tricky thing, there are so many options so many opinions out there it is hard to know what you need for your own individual situation. It can be tricky trying to figure out all the ins and outs to make sure you are getting the coverage that you and your family need.
That is why you need to have someone in your corner that you can trust, and who knows what they are doing. Thankfully I have Chad from Golife to help answer some of the questions you lovely readers had!
- Have control and ownership of the policy, it goes where you go
- Apply for the right amount of coverage you need, not limited to $500,000
- Have the option to pay less and qualify for discounted premiums (not available at work)
- For those who engage in “riskier” sports and hobbies there is usually an additional questionnaire that is required with your application. This helps provide disclosure about the activities and to see if a modified price is required or not.
- Insurance company’s will often have different views on certain activities and hobbies, so it is important to apply with the one that will give you the best offer given the riskier activity.
- For activities like “Rock Climbing or Back Country Skiing” some companies will increase the premium given the higher level of risk, others may exclude the activity, meaning you won’t be covered if you died doing the listed sport or activity.
- Underwriting is completed up front, at the time of your application. Underwriting for Creditor insurance, like with the bank, is often done at the time of claim, obviously not ideal. Watch In Denial
- Single claim: “alive or not”
There are only a few reasons a claim would be denied:
- Act of War – you go into a war
- Active Crime – you are invoking and participating in a crime
- Fraud – you purposefully lied on your application or intent or reckless disregard of the truth
- Material Misrepresentation in the first 2 year of an inforce policy
- Suicide – within the first two years of the policy
- Think of life insurance for a child to be like a “Swiss army knife” – you may use it for education, travel, down payment or financial protection.
- Securing the future insurability of our children is a good thing. Our health can change, it can be out of our control and having some coverage could be helpful to those we love in the future. Most premiums for permanent life insurance for children are guaranteed at the time of the policy is purchased. This means that even if the health of the child changes premiums will remain the same. Permanent plans for children stay in affect past age 18 and usually go till age 100.
- Juvenile insurance plans are one of the only financial tools that you can transfer from parent to child with no tax implications. Parents can be the owners of the life insurance policy for as long as they want. Parents control when it is the right time to give ownership over to the child.
- Life insurance policies for children give parents the control of when they see it being the right time to give their child financial control. With “in trust for accounts”, at age 18 the child gets control of the savings account. With juvenile insurance plans, parents get to decide when the right time to hand over the money is!
- RESPs are still the best way to save for education so don’t be talked into a juvenile policy to be the main funding source for education. The plan may supplement education but RESPs will be the primary source. A rough guide I have always used is that 75% of my kids savings goes towards RESP and other savings and 25% towards a juvenile policy. So if I was saving $100 – $75 RESP and $25 life insurance policy. Remember, what you set up for your first child you may need to do for more children in the future!
With so many different people, families and needs out there it is essential to make sure you are talking to someone who is knowledgeable. Checking out the experts over at Golife.ca is a great first step. Life insurance is important, it isn’t the most glamourous or interesting part of adulthood but it is essential to make sure you and your family are taken care of.
No matter what the universe throws at you, with a little preparation and some insurance and you will make it through with a smile.