If you are in the market for life insurance in Canada, you might be overwhelmed with the options that are available. To make things a bit easier, you need to look at some tips that will help you choose a good life insurance plan. These tips will help you determine what you should look at before choosing and while you are looking at different plans.
The Type Of Life Insurance You Need
Before you start looking at the different life insurance plans on offer, you need to know the type of life insurance that you need to get. There are several different types of life insurance on offer in Canada including term life, universal life, and whole life. It is important that you know a bit about what each has to offer.
Term life insurance will expire after a set amount of time such as 5 years or 20 years. This insurance will also not accumulate any value. This is one of the easiest insurance plans to understand as it will generally be simple.
Universal life insurance is a combination of insurance and investment. Part of your premium will go into your account and increase the net worth while another part is invested. These plans will generally have a higher premium when compared to term life.
Whole life insurance is the most complex plan that you can get. This will have both an insurance and investment component, but will not be as flexible as universal life. Your insurance company will decide on the investments, and the plan is more expensive than the others.
How Much Your Plan Should Be For
Once you know the type of life insurance plan you want, you need to determine how much it should be worth. To determine this, you need to look at the income substitution for your family as well as the costs of taking care of education for your children. Paying down assets and other financial debt will also need to be considered.
Data shows that the average Canadian will choose life insurance under $500K. It is recommended that you speak with a professional to properly determine the value that you need. However, the primary driver of this will be what you want the insurance to cover and how much that will cost.
Choose The Right Company
To get a good life insurance plan, you need to work with the right life insurance provider. There are a lot of insurance companies that offer these plans, and you need to research them. There are some services that offer evaluation based reviews for these companies, and you need to use these ratings.
You should also look online to see what people have to say about the companies. If the company makes it hard for people to get their insurance payouts, you may want to avoid them. Companies that appear to be financially unstable should also be avoided as they might not be around when your plan comes to an end and the payout needs to be made.