The Daily Courier

Get life insurance before it’s too late

- LISA JAFFARY

Do you have a new career, new employer, new home or new vacation property. Maybe you’re recently married or have a new baby? These are times you should review your life insurance coverage. Other events include starting your own business, receiving an inheritanc­e, increasing your mortgage or going through a separation or divorce.

Step one is to review what do you currently have? Do you have insurance through your place of employment or individual policies? Look at the type of insurance (group term, whole life, universal life), the amount of insurance and beneficiar­ies. Make sure all is up to date, including your banking informatio­n and the address on file for you.

Next, review how much you need and what type of insurance is best.

Mortgages (personal or business), family and income protection are the three areas to focus on. Life insurance is for your family, to make sure they have a home, living expenses covered and income.

The third step is to apply for coverage. It is crucial to do this while you qualify for life insurance, critical illness or disability.

Often, after completing the initial questions, you meet with a nurse to complete the medical questionna­ire. Some companies have introduced a tele-interview. You book a time for a phone call to go through the questionna­ire.

The applicatio­n takes medical informatio­n into account, but it also includes your lifestyle details, such as occupation, family history. tobacco and alcohol consumptio­n, driving history, foreign travel, sports (eg., motor vehicle racing, mountainee­ring, hang gliding) and the reason for the insurance.

All this informatio­n is submitted to the insurance company. The company may approve your coverage or may request more informatio­n.

A common medical test is called a paramedica­l exam, performed by a nurse, usually at your home. The nurse asks you questions about your health history and may take blood/urine samples.

The applicatio­n process may require you to complete other medical tests such as ECG.

Upon acceptance, each person is given a rate category based on their current health and lifestyle.

Here are the types of insurance you can purchase. Term Term insurance is inexpensiv­e and valuable when you need a lot of coverage for a period of time. If you have a young family, mortgage or a partner in business, term insurance protects you for a period of time. The most common terms are 10 and 20 years. There are no cash values with these plans and at some point down the road the insurance will be become too expensive to keep. Whole life This option is more expensive than term but this insurance goes for your whole life and has cash values (like owning a home). Universal Life Universal life has two components – insurance and investment. The base premium pays for the insurance while extra money deposited into the plan goes towards the investment portion, with taxfree growth. This plan is also for your whole life.

Business owners can take advantage of insurance planning to protect themselves as ‘key person’ as well as building an investment account for their future.

Lisa Jaffary is a life insurance agent and financial adviser. Email: lisa@pointswest.ca.

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