five things
what to ask when buying life insurance
One in two Canadians wouldn’t even ask their insurance provider to clarify details of their policy, according to a report from TD Insurance. They think it’s too complicated or they feel embarrassed or they’re simply uninterested. So here are some questions to ask to help you understand what you are getting:
1 How much insurance coverage do I need? It depends “If you have a benefit plan at work, you have to coordinate that with what your insurance needs are You can look at it now or you can look five to 10 years in the future,” Mark Halpern, a certified financial planner and president of illnessPROTECTION com, says
2 What type do I need? Should I have term or whole life? Term insurance is cheaper You basically buy it for a term: 10, 20, 100 years, etc With permanent insurance, the most common types are whole life insurance and universal life insurance If you choose to cancel whole life, you can cash out the built-up value that you’ve put in Universal life allows you to invest that money and the investments grow taxdeferred
3 If I’m buying term, what term is appropriate for me? Ten years, 20 years or life? If you choose a 10-year policy, which is inexpensive, it will come up for renewal when you are older and possibly less healthy “Twenty years is where I would look,” Mr Halpern says “Let’s say I get married, I’m buying this insurance; I’m 25 and I’ll have a kid So in 20 years’ time, this kid is going to be 20 years old Hopefully I’ll have paid off my debts My kid will be in university and I’ll have saved a few extra dollars ”
4 If I’m buying term insurance, is it convertible to permanent insurance? Convertible term life insurance offers a provision where (up to a certain age) you can switch your term policy to a permanent policy without a medical exam
5 What is my advisor’s experience? “Do they have any professional designations? Are they only able to sell one company’s products?” Mr Halpern says “You want somebody who is going to guide you through this and see how it fits into your overall planning ”