Ways to Save Money on Life Insurance in Canada
We all want to save money if we can, and below are over 10 ways you can save money when buying life insurance. A lot of different things change the cost of the policy, whether it’s the hobbies or lifestyle choices, your wellbeing, when you apply, what you apply for, and much more. In this blog, we’ll go in depth on ways you can save money on life insurance and the effect these have on your life insurance.
In this Article:
Buy Life Insurance while you’re Young
There are several reasons why it can be beneficial to buy life insurance while you’re young:
- Life insurance premiums are generally lower for younger people: As you get older, the cost of life insurance tends to increase. By purchasing a policy when you’re young, you can lock in a lower premium that will remain in effect for the duration of the policy.
- You may have financial dependents: Even if you’re young, you may still have financial responsibilities, such as a spouse, children, or other dependents who rely on your income. Life insurance can help provide financial security for your loved ones in the event of your unexpected death.
- Your health is likely at its best: Life insurance premiums are based, in part, on your health. If you’re young and in good health, you may be able to qualify for lower premiums.
- You may have longer-term financial goals: Life insurance can be used to help protect your long-term financial goals, such as saving for retirement or paying for your children’s education.
Don’t Smoke
Not smoking can help save money on life insurance because insurers generally consider smokers to be higher risk and therefore charge them higher premiums. This is because smoking is associated with a variety of serious health problems, such as heart disease, lung cancer, and chronic obstructive pulmonary disease (COPD), which can significantly increase the risk of death.
On the other hand, non-smokers are generally considered to be lower risk and may be able to qualify for lower premiums. This can result in significant savings over the long term. By not smoking you can save generally more than 50% in policy costs by being considered a non-smoker. You are considered a non-smoker if you have not smoked for at least over a year or even if you smoke 1 cigar a week. If you’re not sure if you would be considered a smoker, don’t hesitate to contact an advisor who can find an insurer who will fit your smoking habits.
Stay Active and Healthy
Maintaining good health and staying active can help save money on life insurance because insurers generally consider people who are in good health to be lower risk, and may offer them lower premiums. This is because good health is often associated with a lower risk of death and therefore a lower risk for the insurer.
Additionally, engaging in regular physical activity has been shown to have a number of health benefits, including reducing the risk of certain chronic conditions such as heart disease, stroke, and type 2 diabetes. By maintaining good health and staying active, you may be able to qualify for lower premiums on a life insurance policy.
Apply Shortly after your Birthday
This may seem very small in the amount of savings you can achieve, but upon applying to a life insurance policy, the life insurance company will consider your age that’s closest to your birthday. So if more than half a year passes after you turn 39 then you will be considered as age 40 on your application. On the other hand, if you apply within 6 months after your 39th birthday, then you will be considered age 39 for your life insurance application which can save costs, especially long-term if your premium is guaranteed or non-changing.
Get the Right Product
First things first, you need to understand why you want and need life insurance. Everybody has different and unique lives and life insurance isn’t for everyone. There are several reasons why you could you need life insurance, including:
- To protect your loved ones: Life insurance can provide financial security for your loved ones in the event of your unexpected death. It can help pay for expenses such as funeral costs, outstanding debts, and living expenses.
- To protect your assets: If you have significant assets, such as a home or business, life insurance can help protect them in the event of your death.
- Secure your long-term financial goals: Life insurance can be used to help protect your long-term financial goals, such as saving for retirement or paying for your children’s education.
- To replace your income: If you have dependents who rely on your income, life insurance can help replace that income in the event of your death.
Understanding Life Insurance Products
The type of life insurance you choose will determine the price range for your premium – and generally the more lenient or the more benefits offered, the more expensive that type of life insurance will cost. Term life insurance, permanent life insurance, and guaranteed or no-medical life insurance are the main types of life insurance, but they have some important differences:
Term life insurance provides coverage for a specific period of time, such as 10, 20, or 30 years. It pays a benefit to your beneficiaries if you die during the term of the policy. Term life insurance is generally the most affordable type of life insurance, but it does not build cash value and coverage ends when the term is up.
Permanent life insurance provides lifelong coverage and typically includes an investment component, such as a cash value account. This type of policy is more expensive than term life insurance, but it can provide long-term financial security for your beneficiaries. There are several types of permanent life insurance, including whole life, universal life, and variable life.
3. Guaranteed or no-medical life insurance:
No-medical life insurance is a type of policy that does not require a medical exam or the completion of a health questionnaire. Instead, the insurer may rely on other sources of information, such as prescription records or public databases, to determine your eligibility and premium. No-medical life insurance is typically more expensive than traditional life insurance because it involves generally a higher level of risk for the insurer.
Finding the coverage you need
The less coverage you choose, the lower the cost of the premium will be. So, by taking the extra time to figure out how much coverage you need, you can save you a lot of money. There are several steps you can take to find the coverage you need for life insurance:
- Determine your coverage needs: Consider your individual circumstances and financial responsibilities, such as the value of your assets, any outstanding debts, and the income that your loved ones rely on. This will help you determine how much coverage you need.
- Compare quotes from multiple insurers: It’s important to compare quotes from multiple insurers to find the best price and coverage for your needs.
- Consider the type of policy that’s right for you: There are two main types of life insurance: term and permanent. Term life insurance provides coverage for a specific period of time, while permanent life insurance provides lifelong coverage. Determine which type of policy is best for your needs and budget.
- Consider your health and lifestyle: Your health and lifestyle can impact the cost of life insurance. For example, people who are in good health and do not engage in risky activities may be able to qualify for lower premiums.
- Work with a financial advisor or insurance broker: A financial advisor or insurance broker can work with you to determine the right coverage for your specific needs and budget.
Discount with bundles and existing customers
It’s possible that life insurance companies may offer discounts to existing customers for certain types of policies. These discounts may be based on factors such as the length of time you’ve been a customer, the number of policies you have with the company, or your overall insurance history. Typically companies that offer more than just life insurance will have discounts if you combine and bundle multiple products together (like auto insurance and home insurance) or typically banks will give existing customers around a 5-10% discount if you already have an account or a certain type of account with that company.
It’s always a good idea to ask your insurance company about any available discounts or promotions when shopping for a new life insurance policy or renewing an existing one. You can also compare quotes from multiple insurers to make sure you’re getting the best price.
Pay your policy annually
It is common for companies to have the option to pay for your policy on an annual basis rather than monthly. These savings are commonly around 9% which can add up with even the shortest term life insurance policy of 10 years.
Compare Prices
Comparing prices from multiple life insurance companies can help you save money because the cost of life insurance can vary significantly from one insurer to another. By comparing quotes, you can get a sense of the range of prices that are available and find a policy that fits your budget. Also, each company has their own benefits and riders that are available, some have riders that the majority of clients find crucial in their package. Some companies offer living benefits, cash-value, waiver of premiums, and have their own certain exclusions and guidelines – so keep an eye out for benefits and add-ons that can help you and your family.
There are several ways you can compare life insurance prices:
- Use an online comparison tool or free quote tool: Many websites offer tools that allow you to compare quotes from multiple insurers. Simply enter your personal information and the coverage you’re looking for, and the tool will generate a list of quotes for you to compare.
- Contact multiple insurers directly: You can also contact multiple insurers directly to request quotes. Be sure to provide the same information to each company so you can accurately compare the prices.
- Work with a financial advisor or insurance broker: A financial advisor or insurance broker can help you compare quotes from multiple insurers and assist you in finding the right coverage for your specific needs and budget.
Prepare a Strong Case if you have Medical Conditions
If you have medical conditions that may impact your eligibility for life insurance, it’s important to be honest and transparent with the insurance company when applying for coverage. Showing the insurance company that upon being diagnosed with a medical condition, you worked through treatments, followed doctors’ orders well, and showed the progress of your treatment is very helpful and crucial. A life insurance company will look at what the medical condition is and what actions you are taking to keep yourself as healthy as possible. Here are some steps you can take to present your medical conditions to a life insurance company:
- Gather your medical records: It can be helpful to have a copy of your medical records on hand when applying for life insurance. This may include records from your primary care physician, specialists, and any relevant test results.
- Be prepared to answer questions about your medical history: The insurance company may ask you detailed questions about your medical history, including any conditions you have, any medications you take, and any treatments you have received. Be honest and accurate in your responses.
- Consider working with a financial advisor or insurance broker: A financial advisor or insurance broker can help you navigate the process of applying for life insurance and provide guidance on how to present your medical conditions to the insurance company.
Frequently asked questions (FAQ)
Life insurance can be a valuable financial planning tool for many people in Canada. It can provide financial protection for your loved ones in the event of your death, helping to ensure that they are able to maintain their standard of living and meet their financial obligations.
There are several factors to consider when determining whether life insurance is worth it for you in Canada. These include your age, income, number of dependents, and financial goals. For example, if you have young children or other dependents who rely on your income, or if you have a large amount of debt, life insurance may be more important for you. On the other hand, if you are older and have fewer financial responsibilities, you may not need as much life insurance.
It is also important to consider the type of life insurance that is most suitable for your needs. There are several different types of life insurance available in Canada, including term life insurance, permanent life insurance, and critical illness insurance. Each type of insurance has its own benefits and drawbacks, and it is important to choose the one that best meets your needs.
Yes! Because the cost of life insurance depends on many things like your wellbeing and lifestyle choices, you do have limited control over influencing the cost of your policy. Things like choosing the right time to apply, finding the right policy and company, and much more will help lower your premium while making sure you are getting the life insurance policy that best benefits you and your family.
This purely depends on your life and personal or family goals. It is also good to note that changing the type of life insurance policy you have into a permanent life insurance policy can let you have both life insurance and a savings account. Some whole life (permanent) insurance policies have a growing cash-value allowing you to gain money that you are able to use while alive or to increase you coverage on your policy.
You can save over 50% as a healthy individual and be considered a non-smoker. And you are considered a non-smoker if you have smoked for over a year.
Start Saving Money on Life Insurance Now
Picking a life insurance package has many steps, you need to consider the type of life insurance, additional add-ons you could want, the benefits you are looking for, the company and their reliability, and much more. The best advice is to work with a life insurance advisor.
At PolicyLife we give life insurance advice at no extra cost, we can help you find the right life insurance package that suits you and your family needs. PolicyLife can compare more than a dozen top life insurance companies in Canada all at once, and are experienced in getting the policy you need for your budget. PolicyLife services clients in Alberta (AB), British Columbia (BC), and Ontario (ON) – contact us or get a free quote today!
