Right Time to Buy Life Insurance in Canada?

No, You’re Not Too Young

Life insurance is not a topic that people want to think about. Everyone would ideally like to put off this issue for “another year”, “when I’m older and need it”, or “when I get around to it.”

The Ideal Time For Coverage

However, the ideal time to purchase coverage is when you are young and healthy. Rates will be higher if you purchase your policy after health issues arise. Policy rates tend to get more expensive with age, so purchasing life coverage at a younger age can be financially beneficial. Remember, you can’t buy life insurance with just money only, you also buy it with your health!

Life insurance is an essential consideration when purchasing a home or borrowing money for business ventures.

By purchasing your coverage at a younger age, you also have the benefit of choosing benefits that are best suited to you. Different types of insurance offer differing advantages and disadvantages. Take the time to evaluate your current needs, and projected needs for your future and then select the option that fits your life.

Whole Life Insurance

Whole life insurance policies are a viable option for people who are young and in good health. With a whole life policy the premiums are stretched out over a long period of time, minimizing the increasing cost. These premiums can either be spread out over your lifetime, or until a set-upon certain age. The earnings from a whole life insurance policy are tax-deferred, and the death benefit never decreases. These policies have a cash value and can be used for wealth management and estate planning.

Universal Life Insurance

Universal life insurance policies provide the purchaser with the option of being able to reduce or increase the death benefit amount. A great advantage to this type of policy is that the cash value tends to increase in a non-linear fashion, depending on how the purchaser invests his/her money.

Term Life Insurance

Term life insurance is a temporary form of insurance, which covers the purchaser for a limited time span, usually 10 or 20 years, and may be renewable up until a certain age. This is often an attractive option when the insurer wants coverage for a specific debt for a specific time frame (i.e. mortgage). Although there is no cash value, the premiums are lower than for whole life insurance. Some policies allow for the option of converting a term life policy into a whole life policy. Premiums for term life policies will increase at 5, 10, or 20 year intervals with the age of the insured person.

Just remember that the earlier life insurance is purchased, the more options are available to the consumer. Life insurance does not only provide death benefits, but also help you arrange for your long term financial needs and goals.