When shopping for life insurance, you’re often told to compare policies. However, that can be a fairly complicated undertaking. After all, there is much more to each life insurance policy than the premiums themselves. Not only can each policy have completely different features and characteristics, you also need to consider how the structure of the policy matches up with your personal objectives.
Sure, it sounds complicated, but knowing what to look for helps greatly when trying to determine the best life insurance policy for you. Here’s what you should know when comparing life insurance policies:
What is the structure of the life insurance policy?
There are two primary types of life insurance: term life insurance and whole life insurance. Term life insurance provides coverage for a set period of time (known as the ‘term’). After the term has expired so does the life insurance policy. Whole life insurance on the other hand is permanent, and will pay a cash benefit after the insured passes on. You’ll need to decide which policy structure is best for you (term or whole) before digging deeper into the features and benefits of each plan.
How do you want to use your life insurance?
Understanding how you want to use your life insurance is a great way to help with the term vs. whole life insurance decision-making process. Generally term life insurance is best to accommodate temporary needs, such as providing for children until they are grown and able to care for themselves. Conversely, whole life insurance is most often used for more permanent needs, such as ensuring you’re able to cover your final expenses for your family.
Are there any optional features?
Different life insurance policies include different optional features, or ‘riders.’ For example Canada Protection Plan’s life insurance plans can provide the insured with up to 75% of their benefit while still living if they are diagnosed with a terminal illness.
Can you convert your policy?
Some insurance companies allow term life insurance policyholders to convert eligible plans to permanent life insurance. In addition, term life insurance plans can simply be renewed for additional terms. If you’re considering the option of converting your term life insurance policy at a future date, be sure to learn whether or not there are any restrictions as to when you can make the move to a permanent plan.
Is the insurance company in good standing?
When shopping for insurance, you not only want to research policies, but also the insurance companies themselves. In order to ensure their ability to pay claims decades after a policy is issued, insurance companies must maintain large capital reserves, and structure themselves for long-term viability. Every life insurance company is monitored and rated by independent agencies, who assign a letter grade to the financial strength of the insurance company. When doing your research the more A’s a company has the better – a rating of B or lower indicates the company may have difficulty surviving a bad economic environment.
Canada Protection Plan is a leading provider of No Medical Life Insurance. Call 1-877-851-9090 for your no-obligation quote.
