How much does life insurance cost per month?

The cost per month depends on the many factors that help the insurance company decide how much of a risk you are for dying.  These factors include age, gender, lifestyle, health and family medical history.   The amount of life insurance that you request and the length of the insurance contract also affect the cost. Example: A 25 year old female non-smoker wants a $500,000 life insurance policy for 10 years.  Best rate (as of February 2020) would be $12.67 per month. If the same client was age 45, the best rate would be $19.96 per month.

What is a term insurance plan?

A term insurance plan is to provide temporary life insurance coverage for a period of time in your life when your untimely death would create financial hardship for those you leave behind.

What is the basic life insurance?

When referring to a group insurance plan, the basic life insurance is the  amount of coverage negotiated between the employer and the insurance company. The basic life insurance usually includes a lesser amount for a spouse and children of the employee.

What is optional group term life insurance?

Many group insurance plans offer the employee to purchase additional life insurance coverage, up to negotiated limits.  The employee may be required to undergo medical underwriting to prove eligibility.

What is the best age to get life insurance?

When you buy permanent insurance, the younger, the better.  A permanent (aka. whole life) insurance plan, when purchased for a child, can develop into a useful financial tool later in life.  Several insurance companies offer policies that can be fully “paid up” in 20 years or less.  Some of these policies share in the profits of the insurance company and continue to grow in cash value and death benefit long after the policy is paid in full.

What are the different types of life insurance  policies?

You can buy term insurance policies or permanent insurance policies.  Term policies are an insurance contract that last only a fixed period of time.  Term insurance is the least expensive insurance because most people are still alive at the end of the term, and the insurance company has fewer death benefits to pay. People buy term insurance at times in life when debts are higher and a premature death would cause financial hardship to the surviving spouse and/or children.  A permanent life insurance policy is purchased to last a lifetime.  They cost more because eventually the insurance company will pay a death benefit for every policy in force at the time of death.

How is life insurance paid out?

When a death occurs, the beneficiary of the life insurance policy must submit a death claim to the insurance company.  Your insurance broker can help you with the forms.  It is common for the insurance company to issue a cheque within 10 days of receiving the claim.

What does “level” mean in “level term insurance”?

Level term insurance means the death benefit remains the same for the duration of the contract.  The other choice is to buy decreasing term insurance, which reduces the coverage amount each year, usually until it reduces to one-half of the original coverage.  It remains at one-half the original coverage until the contract ends.

What’s the difference between term and whole life insurance policies?

Term insurance provides life insurance coverage for a fixed period of time(term) at a fixed rate.  At the end of the term most policies will automatically renew at a higher rate for the next term. Most term policies expire at age 80.  The few that renew to age 100 offer premiums that are cost prohibitive.  Whole life (aka. permanent) life insurance is coverage that is in effect until death occurs, at any age.  These policies usually have a premium that remains the same for the duration of the contract.

Can you cash in on a term life insurance policy?

No, with exceptions. Some insurers offer a Term to 100 policy that offers cash value if the policy is terminated before death.

What are the benefits of a term life insurance policy?

Affordability is the biggest benefit. Most people are alive at the end of the term, meaning fewer death claims for the insurance company to pay.  This allows allows a client to buy much greater coverage at a time in life when debts are high and financial hardship would fall on those left behind in the event of a premature death of the insured person.

“Buy term and invest the rest” is a slogan used to encourage people to save for the future by investing the money they save when they buy term insurance instead of whole life insurance.  It should be noted that whole life insurance policies can also be used as an investment tool.

What is annually renewable term(YRT) insurance?

Some insurance companies offer term insurance policies that renew every year.  Since premiums are based on age, the premium also increases each year.