OverviewLife Insurance

Do you have loved ones that would be financially impacted if something happened to you? If you answered “yes”, you should consider how you can ensure protection of your loved ones with life insurance.
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Life Insurance

Asked Questions

What is Life Insurance?

Just like other types of insurance like home, auto or health insurance, life insurance is an agreement between you (the policyholder) and an insurance company. A life insurance policy provides financial security for your loved ones by paying a tax-free, lump-sum payment, called a death benefit, to your beneficiaries. Your beneficiaries can use this money without any restrictions. Some of the most common uses include:

  • Paying off a mortgage or other debts to help ensure your house or cottage can remain in the family.
  • Cover the day to day expenses of your beneficiaries so they can maintain their lifestyle after loosing your income.
  • Funding for your children’s education costs or other expenses.
  • Final expenses including funeral costs to ensure your family isn’t left with the bill.
  • Taxes are another significant expense at death in many cases – life insurance can help reduce or eliminate that burden.

Life insurance is designed to spread the risk of someone dying between all policy owners. In some cases, a person may never file a claim on their life insurance before it expires. However, for the policies that do end up resulting in a claim, having that insurance policy is life-changing. You want to provide for your family, and life insurance makes that a reality – no matter what happens. In exchange for this protection, you agree to pay a monthly or yearly premium, as long as you need the coverage. The great advantage of life insurance is that you can lock in your premiums for a period of time so that you always know exactly what you will pay!

Do I need life insurance?

Life insurance is meant to protect your loved ones if you pass away. If you have someone in your life that would be impacted if you passed away – either financially or because you provide them with care – you need insurance. This includes:

  • Your partner.
  • Children.
  • Parent(s).
  • Sibling(s).
  • Anyone close to you.

You may also have a mortgage, other debt, or education costs that you want to cover in the future. And, of course, funeral expenses and taxes upon death. All of these can be covered with proper life insurance planning.

At this point, you may already realize that you need life insurance to protect your loved ones for one of the reasons discussed above, but what if those don’t apply? Perhaps you have a charity or cause that is important to you. Did you know a life insurance policy can be used to support a charity of your choice as well?

If you still are unsure whether you require life insurance at this time, do you expect there to be a time in the future where you will need it? That too is a great reason to invest in life insurance, as the younger and healthier you are, the easier it is to get insured. You will also benefit from lower premiums that you can lock in for the entirety of your policy term!

Think of life insurance like an umbrella, you don’t know exactly when you might need it, but you will be glad to have it when the time comes!

How much does life insurance cost?

Life insurance can cost as little as the price of your favourite latte. Premiums vary depending on the type of insurance you select and other factors including:

  • The amount of coverage.
  • The insured person’s age, gender and smoking status.
  • Medical and personal history such as health, occupation, hobbies, family history, medications.

With all the life insurance options, there is something for every situation, no matter how simple or complex it is! We are here to assist you by reviewing your options so that you can feel confident that you and your loved ones are protected.

Getting a personalized quote for life insurance is easy and only takes minutes with Hometown Life Insurance. Get an insurance quote here!

What affects my Life Insurance premiums?

There are a variety of factors that can affect your premium, including:

  • Age (As you get older, insurance costs increase).
  • Sex at Birth (Females pay less for life insurance than males of the same age).
  • Amount of coverage.
  • Term of the policy.
  • If you are a smoker, you can expect to pay more for insurance (if you quit, you are able to get your price reduced).
  • Personal health information will also factor into your pricing.

Ensuring your policy fits into your budget is a key component of our process because having coverage in place when you need it most is always most important.

How much coverage do I need?

The amount of life insurance coverage that you need can be determined with a short conversation with a licensed advisor.

We take the “needs-based approach” to life insurance for our clients. By reviewing the needs of each one of our clients, we find out what is most important to you. Your life insurance should provide protection for those things you’ve identified. Maybe it’s paying off your mortgage or helping your children with education costs, or ensuring that your partner can retire on-time. Whatever your goal, life insurance can help ensure that you reach it – no matter what happens.

What are the types of Life Insurance?

Term Life Insurance

Term life insurance is simple and affordable. It provides protection for a defined period of time, and is especially helpful when life insurance needs are high, and funds are limited. In the event of death, it pays a tax-free cash benefit (death benefit) to your named beneficiaries. The cost is locked in for the term of the policy, so you know exactly what you will pay!
This term life insurance coverage may be right for you if:
  • You have any debts, loans or mortgages.
  • You are saving for a child’s education costs.
  • You have loved ones that rely on your income.
  • You provide care for any of your loved ones.
Participating Life Insurance
Participating life insurance provides lifelong protection, and the opportunity for tax-advantaged, cash value growth, throughout the life of the policy. If you pass away, it pays a tax-free cash benefit, called a death benefit, to your named beneficiaries. Coverage and premiums are guaranteed for life, and you may also receive dividends within the policy that can be used to increase coverage, decrease premium payments, or even taken out as cash.
This coverage may be right for you if:
  • You want to cover final expenses including funeral costs and not leave the burden to your loved ones.
  • You have a cottage or house that you want to ensure will stay in the family.
  • You have investments or retirement accounts that will be taxed at death.
  • You want coverage that will grow over time.
Universal Life Insurance
Universal life (UL) insurance provides lifelong protection, with an investment component. UL provides flexibility and customization based on your risk profile and objectives. In the event of death, it pays a tax-free cash payment, called a death benefit, to your named beneficiaries. Your premiums are deposited into a policy fund that will be used to pay for the insurance costs. The remaining balance of funds is invested on a tax-advantaged basis in a variety of investment options.
This universal life insurance coverage may be right for you if:
  • You want to cover final expenses (funeral costs) for your loved ones.
  • You have a cottage or house that you want to leave to your loved ones,
  • You want flexibility in your insurance policy premiums/coverage.
  • You have maximized your RRSP/TFSA contributions.
  • You want coverage that can grow over time.

Our team can help you determine which one is best suited for you!

Copyright © 2021 Hometown Life Insurance.

Copyright © 2021 Hometown Life Insurance.