Here’s how I bought life insurance without getting screwed:
1. Get Term Life Insurance
Here is some of the gems.
“The better term life policies have this feature which guarantees a policy cannot be canceled because of poor health. Do not buy a life insurance policy without guaranteed renewability”.
Answer: In Canada all term policies offer guaranteed renewal rates…guess what usually 3 times higher!
Here are some places to consider looking for low-cost term insurance:
•Are you a member of any Groups, Professional Associations, Business Organizations, or Alumni Associations? You can often find low-cost insurance by inquiring within your clubs and organizations
Answer: If you are healthy these rates are the highest these rates are much higher than the above.
christine DECEMBER 12TH, 2011
I am in the process of getting life insurance for my husband and I, and wow is there a dearth of information about what you are actually signing. We are going with an independent Canadian company. On the illustration, we have individual quotes, then there is a lump sum quote onto which is added a policy fee which is apparently 75 dollars a year. Is this a typical fee? Because we are filing jointly we have a 50% savings on the second policy, but it seems that the policy might be 10 dollars more a month than comparable policies (but it is a 25 year term vs the more traditional 20 year terms, so maybe that isn’t so bad).
So two questions: is the extra policy fee normal, and does a 10 dollar discrepancy make up for an extra 5 years on a term. I just want to make sure that we are getting what we should get, not necessarily a deal. I made a mistake once in not asking enough questions, and I don’t want to make that mistake again.
Kerry DECEMBER 12TH, 2011
Hi Christine — In Canada there are two types of life insurance to choose from — term and permanent. Term life insurance covers you for a specified period of time: generally one, five, 10, 20, or 30 years. Term is usually the least expensive type of insurance, and is often called pure insurance coverage since it doesn’t include an accumulating investment portion.
Permanent insurance covers your back for as long as you live, and comes in three variations: whole life, universal life, and term-to-100. Whole life and universal life can accumulate investments inside the policy, while a term-to-100 policy is more like term insurance in that there is no investment portion.
The policy you describe does not sound like term life, hence all the extras and added fees. I would suggest getting another quote for pure term life insurance just to see the difference.
Answer: All insurance companies charge a policy including RBC!! the one Squawkfox suggested to look at!
christine DECEMBER 12TH, 2011
Brian, thanks for letting me know! I am so impressed by this blog community helping each other out. This helps allay my concern with respect to the fees. The way it was spelled out on the illustration was to detail each policy base monthly fee, then the combined PLUS policy fee. The extra 10 dollars was not accounted for elsewhere and when I asked about this, the agent was surprised and couldn’t immediately explain it–again, not inspiring confidence.
We went with the cooperators initially because of the 25 year term vs the 20 year that RBC offers, but now I am wondering if that is worthwhile. We haven’t committed to anything yet, but I suppose it is pending.
We are the first of our friends to look into life insurance, so are sort of paving the way ourselves.
The advice and mistakes continue..