Life Insurance

The thought of dying without having provided for a person’s immediate family can weigh upon many people’s minds. This is especially the case when the person is the main income earner supporting a young family. Life insurance aims to mitigate this problem.

Term vs Whole Life Insurance

Life insurance comes as a number of products. There is term life insurance, which means that the person is insured for a certain amount of years. There is whole life cover, which pays whenever the person dies, in which case the premiums can be higher.

Life insurance companies also sell pension annuities which can be seen as the reverse of life insurance with a large up front premium and paying out on a regular basis as long as the person lives. As annuities rely on the same sort of life expectancy calculations as life insurance policies then they are offered by life insurers.

Group Insurance

Life insurance is also commonly provided as “group insurance”. This is when a life insurer is allowed to market to a carefully chosen group such as a trade union, employee group or alumni association. Due to the nature of the group and the lower marketing costs then the premiums for life cover tend to be lower. Members of the public who are not members of these groups do not get access to these schemes. This can often be the best life insurance product. Life insurance can often be offered by employers, as part of the employment package.

Life Insurance companies

Canada has seen a large number of mutual life insurers grow up. Many of these have their roots in the mutual sector, although in the late 1990s a large number of them “demutualized” and became commercial companies. Due to the formerly mutual nature of the insurance companies there is still a large mutual presence. Many life insurance companies are strong in a certain region, such as Desjardins or SSQ in Quebec or Assumption Life in the Maritime Provinces. Other companies specialize in insuring certain classes of people, for example the Co-Operators specialize in providing life insurance to farmers. There are some general life insurers who are big worldwide companies, such as Sun Life and Manulife.

How to get cheap life insurance

The fastest way to get affordable life insurance is to shop around and get a number of life insurance quotes and compare life insurance quotes. Life insurance comparison works because different life insurers aim for different markets and so factors such as age and lifestyle will have different weightings with different advisors and life insurance rates can differ for the same person. A longer term option is to deal with bad habits. Bad habits such as smoking, little or no exercise and a poor diet can add thousands on to the cost of life insurance throughout a working life.

Regularly reviewing the level of life insurance can also be an effective way to cut costs. For example if children are no longer dependent then this will reduce the need for cover.