Life Insurance Information & Rates

Questions? Email Kevin At

kevin@lethbridgelife.ca
Kevin Kranzler

Lethbridge Insurance Information

There are many different types of life insurance products available to Canadians. Hopefully the following information will better your understanding of life insurance as well as allow you to make an informed decision with regards to what type of life insurance policy works for you.

Life Insurance in General

Life Insurance exists for the purpose of providing a lump-sum payment to a named beneficiary upon the death of the ‘insured life/policyholder’.

Policyholder / Insured Life – the individual whose life is insured/underwritten on the policy.
Policy Owner – The individual or business who owns/pays for the policy. The policy owner does not have to be the policyholder; however, the policy owner needs to have an ‘insurable interest’ in the policyholder.
Insurable Interest – a financial interest in the life that is covered by a life insurance contract.
Beneficiary – the individual, individuals, or entity that is designated to receive the lump-sum payment when a claim is made on the life insurance policy (ie) on the death of the policyholder.

Types Of Life Insurance Policies

Term Life Insurance

Generally Term Insurance policies are for 10 or 20 years. However, there are companies that offer different term variations (ie) 14, 25 years. Term Insurance is easy and affordable.

For Example: After considering his needs, Matt decides he wants to get $500,000 in Life Insurance Coverage to cover his new mortgage amount on the new house he purchased. He’s on a payment schedule to be mortgage free in 20 years. Therefore we match Jason to a Term 20 $500,000 Policy.

When you apply for a term policy, you agree to pay a fixed price for a specified term according to the policy. When the policy reaches the end of its term the policy goes up for renewal, giving you the option to renew the policy without having to provide medical evidence. However, keep in mind, you are now that much older in age at renewal time, meaning rates will be that much more expensive, if you do in fact still have a need to renew the policy and keep it in force.

Term Insurance is a great product that you can customize to your specific needs. And in most cases they are the most affordable option!

*The Term 20 Life Insurance Policy is the most popular of policies that I have written over my career.

Permanent Life Insurance

Permanent Life Insurance policies allow you to lock in the cost of insurance for life. This means that you will never have to worry about the price of the life insurance renewing at higher rates, like a term insurance policy would. Permanent Policies are either Universal Life or Whole Life Policies. The difference between these two policies comes down to the details of the policy and the specific needs of the individuals involved.

Within Permanent policies you can over-contribute and actually invest within the policy, allowing for tax-free growth until the money is withdrawn. There are also permanent policies that, for an extra premium, can be paid off within a certain time.

For Example: I personally have a Universal Life policy. My cost is a fixed amount per month for life. What I do is actually over-contribute, meaning that the extra money I put in the policy is invested into *segregated funds. In year 20 my policies investments will have grown to a point at which the policy can pay for itself for the rest of my life! The monthly premium will simply come out of the investment account, and the rest of the funds continue to grow as according to how I have invested it.

*Segregated Funds are investment funds offered by insurance companies. They are similar to mutual funds but offer distinct advantages: Similar to life insurance policies, segregated funds have death benefit guarantees, named beneficiaries, creditor protection, safety and security! (for more information on Segregated Funds, just ask.)

Permanent Life Insurance Policies are a great product as well. There are many options available within permanent policies that allow a client to customize a policy to their specific needs, while also budgeting that cost for life, or having it paid-up in the future! Permanent Life policies are perfect for newborns, children, and young adults because the rates are very low at the early stages of life. Ask how a policy like this can work for you!

Mortgage Life Insurance

Replace it NOW! Bank are in the business of lending and taking deposits. Not Selling Life Insurance!

Here is what the Banks don’t tell you. (I used to work for a bank, so I know how they operate).

Life Insurance is just a quick up-sell to Mortgage clients. The Bank Lender makes a bonus when you sign up and it looks good on their sales targets. Unfortunately the Lender quickly sells people on the inexpensiveness of the attached mortgage life policy. However, the reality is that the Lender IS NOT a licensed or qualified insurance agent, nor can a Lender represent themselves as an Life Insurance agent. Bankers do not know how to provide a proper needs analysis for Life Insurance, nor do they have the option to offer insurance other than Mortgage Insurance. Banks ARE NOT allowed to offer individual Life Insurance Products, it is against Federal Regulations. You can trust a bank for savings accounts and lending products, but NOT for Life Insurance.

NOTE: Individual Life Insurance Policies are medically underwritten, meaning that the insurance company takes steps to assess the risk of your life when you are applying for life insurance, by having you provide information on your medical history. This allows the Life Insurance company to get a better understanding of the possible risks associated with your specific life and situation. Full Disclosure must be given to the Life Insurance company to protect the applicant in the event of a claim dispute. With a Mortgage Insurance Policy, all a client does is check a box or two on a form saying they ‘accept’ coverage. What the Bank lender doesn’t tell you is that this policy is underwritten at the time of death, hence why there are so many horror stories of mortgage insurance claims being denied. Reason why… Lack of Full Disclosure. Having an attached mortgage life policy in no way, shape or form, gives an individual the same protection as an personal life insurance policy does, ask me why!

Don’t forget! Mortgage Insurance rates increase every 5 years with the mortgage renewal. Eventually this cheap coverage becomes very expensive and you’ll always have to worry if the mortgage life policy will even pay out if a claim is made.

Frequently Asked Questions

Who needs a life insurance policy?

Anyone who is married, has children, or any type of debt obligations (loans, mortgages, credit cards, etc.) NEEDS to have a personal Life Insurance policy in place, to protect his or her family and assets! This goes for business owners and partnerships as well.

What will a personal life insurance policy cost?

That depends on the person… ie: a persons date of birth, sex, smoking status, requested amount of coverage, and health status all affect the price of a policy.

How much coverage does a person need?

Again, that depends on the person… That is why we do a ‘Life Insurance Needs Analysis’, where we simply compare your assets and debt obligations, as well as any future income needs for any survivors to come up with a sufficient amount of coverage.

What company should be used?

All insurance companies offer the same products, the key is finding the company that has the most efficient underwriting and that offers the best price… and that is where LethbridgeLife.ca comes in!

How do you start a life insurance application process?

Submit your information for a quote or contact Kevin today!

Why should someone use a life insurance broker?

A Broker is contracted with multiple Insurance Companies, allowing the Broker to shop all of the Companies he/she represents in order to get the client the best possible price. Moreover, as a fully licensed Life Insurance Broker, I have the knowledge, information, and professional obligation to do what is in the best interest of my clients.

Are there any useful tips a client should know when considering purchasing a life insurance policy?

Keep it Simple! A client needs to remember 2 things: get enough life insurance to cover what you need to protect, and make sure it fits into your budget. The best way to figure this out is to sit down with a Broker such as myself and discuss exactly what your needs and wants for Life Insurance are.

Life happens FAST… Just ask Dave! As his family grows, so does his financial responsibilities. But Dave isn’t concerned. He has life insurance in place for both himself, his wife, and the 3 little ones. Now instead of stressing about financial ‘what ifs’, Dave can worry about what kind of mischief his 2 daughters are getting their new little brother into.

LONG TERM CARE INSURANCE

Have you considered the long term costs of nursing care, rehabilitation and/or therapy, or personal care?

HEALTH INSURANCE

Are you employed at a company that doesn’t offer group benefits? I represent multiple companies who offer individual Health Insurance products.