Fact CheckedIf you want to get the best life insurance policy possible, I have a few words of advice.
The internet is a terrific source of information. Virtually anything you want to know is at your fingertips, which makes shopping much more accessible…in some ways.
Unfortunately, there is a lot of inconsistency. Some articles are better than others, and the amount of data available is staggering—so much so that Clients often get lost and give up.
I started the Policy Architects blog to provide a one-stop shop for user-friendly advice that helps you save money, time, and hassle. So, I am sharing my top tips for getting the BEST Life Insurance Policy…affordably.
What is a Life Insurance Policy?
Life insurance has a very long history. It was created in 100 BC in Rome to cover burial costs. Burial clubs were the brainchild of Caius Marius and were founded to help widows and families take care of their end-of-life obligations.
Life insurance is a contract between the policyholder (the person who buys the coverage) and a life insurance company.
In a nutshell, you pay premiums (payments for coverage)to the life insurance company to cover you for a certain period (term). In return, they pay your beneficiaries an agreed-upon sum (face value) should you die while the coverage is in force.
There are two types of life insurance: term insurance, which provides temporary coverage during a period of financial vulnerability. Term insurance does not guarantee a payout, making it much more affordable. Typical terms are 10, 20, and 30 years.
The second type of coverage is permanent. It covers you until the day you die and typically has a cash value component. This is a much more expensive form of life insurance for obvious reasons.
“The beautiful thing about life insurance is that it provides options for your loved ones. It doesn’t even have to be a large policy to make a big difference in their lives.”
After Selecting Your Coverage, You Typically Answer Questions & Take a Medical Exam
Traditionally, underwritten policies (both permanent and term) require a medical exam. Clients typically come to me to discuss their finances, goals, and products.
I asked them several questions during this meeting to determine what coverage and company best suits them.
Then, we set up an appointment for a medical exam.
The test results and the information I gather are sent to the insurer’s underwriting department. Based on this data, the underwriter issues a rating determining how much the policyholder pays monthly, yearly, or lump sum.
When all of this has been settled and you are ready to accept the company’s offer, you will receive the life insurance policy in the mail.
“Please note: You can get no exam medical insurance. But please be aware that it will cost you more. Life insurance is all about assessing risk. The more an insurer knows about you the cheaper your premiums are.”
5 Tips to Get the BEST Life Insurance Policy Today
1. Always Work With An Independent Life Insurance Agent
If you are looking for the best life insurance policy, always seek the services of a GREAT independent life insurance agent…
…and BEFORE you start, NO, this is not self-serving advice. Even if I weren’t an independent life insurance agent, I would tell my family to do this.
Why?
We have access to Canada’s top life insurance companies and know the ins and outs of each insurer’s underwriting processes.
This is important because not all life insurance companies are created equal. If you have someone in your corner who understands the niches, you save time, money, and hassle.
If you go to a tied agent (someone who works only for the insurer that employs them), you only get quotes for the products they sell. This is a costly misstep that can cost you thousands more over your term.
2. Don’t Get Lured Into No Medical Exam Life Insurance Unless You Are in Poor Health or Want a Final Expense Policy
The more a life insurance company knows about you, the better when it comes to your health. Life insurance is an industry based on risk assessment. The closer you are to death, the more it costs to insure you.
If you skip the medical exam, you’ll be placed in a pool with high-risk cases, which means you’ll pay more.
….unless you have serious medical issues.
Another caveat is final expense insurance doesn’t require a medical exam and is very affordable, especially for those in their elder years who are bound to have health issues.
Buyer beware: there are two different types of no-medical coverage:
- Simplified Issue: You are asked questions that determine your premiums. This is the most affordable type of no-medical coverage.
- Guaranteed Issue: This coverage is available to anyone, which means it’s also the most costly. Please note that there is a two-year waiting period to receive a payout. If you are gravely ill and die before that period is up, your beneficiaries will receive your premiums back.
3. Quit Smoking
Smoking is deadly, and underwriters KNOW this. You pay almost twice a non-smoker’s rate for life insurance coverage.
OUCH.
So cut it out! It’s simply not worth it.
If you are a smoker, don’t give up hope. You can embark on a smoking cessation program and reapply for nonsmoking rates once you’ve been smoke-free for 12 months.
My best advice is to speak to your general physician and let them know you quit smoking so you have a solid source to back you up when you reapply.
4. Don’t Put Off Coverage
If you want the best life insurance policy, get on it TODAY. Waiting doesn’t ever help people, and in fact, it usually turns into an endless cycle.
I have heard it all:
I’m applying when I lose 10 lbs, get fitter, and quit smoking, maybe next year!
The fact remains that it’s never going to feel like the right time to get life insurance. There are a million excuses you can employ.
Sadly, I have seen clients procrastinate about more expensive premiums OR having no insurance.
Do it today! Most people are much healthier than they think.
5. Avoid Permanent Coverage UNLESS It’s a Great Fit
Permanent life insurance is expensive and can be complicated. If you are looking for the best life insurance policy, you must know that term coverage works for most people.
That’s not to say that permanent coverage doesn’t have its place because it does. Here are situations where this type of insurance works a charm:
- You have a large estate and are worried about your kids having to foot a large tax bill
- Business interests are a big concern. You want to ensure the business continues after your demise and/or have employees or partners to consider.
- You have a child with special needs and require funds to make their lives run smoothly after you die.
- Final expenses. You want to ensure they are covered and your loved ones don’t have to worry.
- You have a cottage, and you don’t want your family to have to sell it to pay the taxes.
- You’ve cosigned for your child’s debt for a mortgage of university.
Anyway, you get the picture. Permanent coverage is for people with expendable income. If you seek protection during your most vulnerable years, term is the most flexible and affordable option.
6. Don’t Underinsure Yourself
No one wants to buy life insurance. It’s an expense that isn’t all that inspiring, but it’s one of the most loving things you can do for your family.
Losing an income is serious, and things unravel fast. Debts don’t go away, but when a salary vanishes, it often sends your loved ones into a financial tailspin they never recover from.
To prevent that from happening, you need to crunch the numbers. We suggest 7 – 10 times your salary to keep you going. For example, if you make $60K annually, I recommend $600K in life insurance. While this may sound like a lot of cash, it disappears quickly.
7. Pick the RIGHT Beneficiary & Update The Information Yearly
Selecting the proper beneficiary is very important. So please do not pick out a minor without assigning a trustee to manage the cash.
If you do, your kids won’t have any access to the funds until they turn 18, which I am sure is not the intention.
It’s also important to remember to update the information. Circumstances change, and people die and move. Trust me, you don’t want the insurance company to be responsible for tracking down your beneficiary. This results in delays and sometimes even a payout that is never made.
Get the BEST Life Insurance Policy NOW!
If you want to get the best life insurance policy, then you need to call Policy Architects TODAY!
We have access to the top Canadian Life Insurance companies and want to help you find the perfect fit for your unique circumstances.
If you are reading my blog posts, you know that not all insurers are created equal. To save money, time, and frustration, you must speak to a knowledgeable independent agent who understands this complicated business.
A perfect fit may save you 10’s of thousands of dollars over your term. That’s some serious cash.
So why not speak to an agent who cares and wants you to be a client for life? Call us now.
