Life and health insurance are important tools to protect your family, yourself, and what you’ve worked hard for and should be included in almost everyone’s financial plan. The interesting thing is that life insurance is no longer what you remember your parents talking about. Things have changed dramatically to help more Canadians get the coverage they need at a price they can afford.
Here are some of the more noteworthy developments:
You Don’t have to be Young and Healthy to Qualify for a Good Rate
Several Canadian life insurance companies have loosened up their qualification criteria and added no-medical products to their lineup. What this means is that health conditions like advanced age, diabetes, cancer in remission, and mental illness no longer prevent you from getting a policy. No-medical policies come in two forms: simplified issue and guaranteed issue. Neither policy requires a pre-qualifying doctor’s visit. Simplified issue has a few health-related questions to answer as part of the application process. Guaranteed issue has no health questions at all.
You Can Insure Against Critical Illnesses, Including Cancer
For many families, a great financial risk is not just the passing of the breadwinner or caregiver; it is that person becoming ill and unable to work for a prolonged period of time. While disability insurance replaces a portion of your income if you have a debilitating accident or injury, critical illness insurance is for if you get cancer, have a heart attack, need a coronary bypass – in other words, if you develop a serious illness that takes you out of the work force/caregiver role for months.
Critical illness insurance provides you with a “living benefit;” it pays out while you are still alive. It’s a tax-free lump sum of cash that can be used in any way you choose. For many, this means money to keep up with bill and mortgage payments while the sick person recovers; paying for medical treatments and medications that are not covered by provincial health care; renovating the house to make it more accessible for hospital-grade beds, mobility aids, etc.; or even taking a relaxing vacation to a warm climate, where the family can rest after the trauma of a prolonged illness.
Casual Marijuana Smokers Can Get Non-Smokers Rates
Being a smoker is the fastest way to double your life insurance costs, and for many years, underwriters made no distinction between cigarette and marijuana smokers. Now, as Canada gets closer to legalizing marijuana, life insurance carriers have stepped in to accommodate changing attitudes about the drug.
A handful of carriers will now insure casual marijuana smokers at non-smoker rates. This saves such smokers about 50 per cent on policy costs. There are some conditions, including how often you smoke and how you take the drug, and not all carriers are on board, but Canadians that avoided life insurance for this reason can now get the coverage they need.
Brokers Do the Work for You
In the past, to get life insurance, you had to go to a carrier, have an appointment in your home or their office, and then compare what they told you with other products on the market. Now brokers are a thing.
Life insurance brokers are like freelance insurance advisors. While an agent can only sell the products of one company, such as a Manulife agent, a SunLife agent, or a BMO agent, a broker can sell the products of any carrier in Canada.
Brokers’ services are free because the carrier pays them a commission on the policies they sell. This provides a much more flexible and transparent way for Canadians to get life insurance. They simply call a broker, discuss their needs, and the broker does the leg work in finding and comparing policies. The broker then helps the client with the application process once they agree on a policy. Most brokers can work with you online or over the phone.
Why All These Changes?
The life insurance industry realizes that Canadians are changing. They are living longer, they are outlasting what used to be fatal diseases, and their lifestyles are busier than ever. By removing past barriers (advanced age, illness, smoking, inconvenience) underwriters know more people will get the protection of insurance.
Be Proactive about Your Financial Risks
Ask yourself one question: If the household income or family caregiver services were interrupted or stopped, how long would it take for us to fall into debt?
Life insurance protects against the inevitable life surprises that are so hard on your income. Life’s surprises are going to happen to you whether or not you are insured, but now, with life and health insurance being more accessible and affordable than ever, you can be financially prepared before those nasty surprises strike.
Nerissa McNaughton is a Life Insurance Broker with Reassured For Life, an Alberta life insurance brokerage, providing advisor services.