Read up on how much insurance to buy, and find out what insurance companies check into when they calculate your insurance premium.
Getting enough insurance
A lot of insurance people will suggest that you buy at least 5 times your current annual income. But this is just a suggestion. You really need to consider your own particular situation.
So where do you start? A good idea is to figure out how much income you would need to replace, and for how many years. Consider expenses like funeral costs and legal fees. Then add ongoing costs like groceries, clothing, utility bills, daycare, mortgage payments and any outstanding loans. You'll end up with a rough estimate of how much insurance coverage is best for your family.
What your insurance will cost
There's no such thing as a one-size-fits-all insurance policy. Insurance professionals need to look at a lot of different things before they come up with a final insurance rate. They'll consider your age, your gender, whether you're a smoker, and your past and current health record. Then they'll balance all that with the amount and type of policy that you're applying for.
How smoking affects your premium
Smokers have a higher annual premium than non-smokers. Insurance companies generally consider someone a non-smoker if they have not smoked for a minimum of twelve months. As well, if you use other forms of tobacco (like cigars, pipes and chewing tobacco), many insurance companies consider this the same as if you were a cigarette smoker.
Paying a level premium
When you have a policy with a level premium, that means you pay the same amount on a monthly or annual premium, for the entire term of your insurance policy. Your premium does not increase or decrease - it stays at a level value.
Life insurance quickguides
- Introduction to life insurance in Canada
- All about term life insurance coverage
- Life insurance: Dollars & sense