Term Life Insurance

If you live past the end of your initial term, your coverage doesn’t necessarily stop immediately; term policies are guaranteed renewable, meaning you can continue coverage, at a higher premium based on your attained age at renewal. Eventually, the policy will reach a final expiry age (often 85), at which point coverage ends permanently. If you outlive the final expiry date, the coverage terminates, you stop paying premiums, and no death benefit is paid.

No. The standard term life insurance does not have a cash value or savings component, and premiums are not refunded if the insured outlives the policy term or cancels the policy. The premiums paid are solely for the death benefit protection during the term.

No, you cannot borrow against a standard term life insurance policy because it does not accumulate any cash value. Only permanent life insurance policies (like Whole Life or Universal Life) typically offer policy loan features based on their cash value.

The amount varies greatly depending on individual circumstances.We use the DIME method (Debt Outstanding, Income Replacement, Mortgage Balance, Kids Education Cost) to calculate the insurance protection needs.

A common guideline is 5 to 10 times your annual income. However, a more precise calculation should consider factors like income replacement needs for dependents, outstanding debts (mortgage, loans), future education costs for children, final expenses, and your family’s lifestyle needs. Using an online calculator or consulting with a financial advisor can help determine an appropriate amount.

Neither is inherently “better”; they serve different purposes for each stage of life.

Term life is ideal for covering temporary needs affordably mainly to protect the family if you die young (like mortgage protection or income replacement while children are young).

Permanent life is better suited for lifelong needs whenever the person die, like estate tax planning, final expense coverage, creating wealth for the next generation or leaving a legacy, but it comes at a higher cost.

The best choice depends on your specific financial goals, budget, and time horizon. Some people hold both types of insurance policies in layers to achieve financial security for each stage of life including tax sheltered cash value for retirement or old age income.

Term Life Insurance Premiums are typically guaranteed level during the initial term you select (e.g., 10, 20, 30 years). However, suppose you choose to renew the policy after the initial term expires. In that case, the premiums will increase based on your attained (older) age at the date of renewal and the insurer’s current rates. Therefore, if your protection needs are long-term, it is crucial to plan the options in advance.

The maximum age to apply for term life insurance varies by insurer and product, but it’s often around age 70. The age to which coverage can be renewed or maintained also varies, commonly up to age 85, depending on the policy structure.

Standard exclusions include death by suicide within the first two years of the policy taking effect (in which case premiums paid are usually refunded). Claims may also be denied due to fraudulent information or material misrepresentation on the application. Specific policies might have other exclusions (e.g., related to war, criminal activity, or extremely hazardous activities), which will be detailed in the contract.

Yes, it is permissible and sometimes advisable to have multiple life insurance policies to meet the challenges of each stage of life, e.g., a group policy through work to cover while working years and an individual term policy for mortgage or numerous individual policies like term insurance for temporary needs and permanent insurance for wealth creation to meet different needs or coverage levels. Insurers will consider your total coverage amount during underwriting to prevent over-insurance.

Not always. Whether a medical exam is required depends on your age, the amount of coverage you’re applying for, your health history, and the insurer’s underwriting guidelines. Many applications for moderate coverage amounts on younger, healthy individuals may be approved without an exam. No-medical or simplified issue policies are also available, but typically have higher premiums or lower coverage limits.

You don’t necessarily need to be a Canadian citizen, but you typically must be a Canadian resident meeting the insurer’s specific residency requirements to apply for and maintain coverage.

Policies typically include a grace period (often 30 or 31 days) after the premium due date, during which the policy remains in force. If the premium isn’t paid by the end of the grace period, the policy will lapse (terminate). Depending on the policy terms and how long it has lapsed, you might be able to reinstate it, which may require paying back missed premiums and possibly providing new evidence of insurability.

Once the insurer receives all required claim forms and documentation (like the death certificate), and assuming there are no complications (like death within the contestability period or beneficiary disputes), the death benefit is typically paid out within a few weeks.