What you need to know about COVID-19 and purchasing life insurance

What you need to know about COVID-19 and purchasing Life Insurance

Are you looking for Life Insurance during the COVID19 crisis? Here’s what you need to know. 
 
There is a misconception that life insurance is now harder to apple for because of COVID19. This is simply incorrect, in fact, it is now easier to apply for life insurance than ever before. Most Canadian insurance companies have made it easier for Canadians to apply and purchase for life insurance. Here is what you need to know. 
 

Easy application process 
 
First, because of the recent outbreak, most companies have made applying for life insurance easier. You can now purchase life insurance without having to meet with an advisor face-to-face. Most insurance can now be applied for online and a non-commissioned advisor can walk you through the process over a phone. This also means the approval times have been cut down, so your coverage can be placed in effect much sooner. 
 

Coverage limits 
 
When it comes to applying for coverage over the phone, their normally will be a maximum you can apply for. With most companies the most they can apply for is $1,000,000. However some companies allow more. As I write this from our office in Richmond hill Ontario, companies like Desjardins offer up to $5,000,000 of life insurance coverage without having to meet with an advisor face-to-face. This means for most Canadians they can find an option that is right for them without having to worry about the process. 
 

No medical tests
 
Depending on the coverage you are apply for, you may be able to purchase coverage without having to have any blood work, saliva test or urine samples taken. Typically you will need to ask a series of health related questions first. The amount of questions will be depended on the carrier you go with. The good news, is there are carriers that offer guaranteed issue policies even if you are in a poor health condition. 
 

Guaranteed Issue Policies  
 
Guaranteed issue policies are great for people with health conditions, who take several different types of medication and for people who are little older and are worried about high premiums. 
 
The amount of coverage you can purchase with a guaranteed issue policy does change depending on how you answer the questions. The amount of coverage you can with a guaranteed issue policy ranges from $25,000 to $1,000,000 of coverage.
 
Think about all the people you care about and ask yourself, what would their life look like if you were not around to provide for them. How would they be impacted financially? Would they have trouble paying for a mortgage, food cost, clothing etc. If you answered yes, you should look for a life insurance policy that will help you protect the people you care about that doesn’t break the bank to get you there. 

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What you need to know about Mortgage Insurance

What you need to know about Mortgage Insurance

During real estate transactions, people are bombarded with so much information (e.g., Mortgage, Land Transfer) that nobody has the time or the patience to research for the best Mortgage Insurance coverage. You spend all this time to make sure your mortgage is right, shouldn’t your mortgage insurance be set up correctly too?

Although the mortgage insurance offered through your bank/financial lender is not a bad plan, it does come with a few drawbacks:

  • Plan Structure – normally are not competitive with what’s available 
  • Covered Benefits – Except mortgage life insurance
  • Premiums – Majority of time you’ll save money when you shop around

An alternative to a lenders mortgage insurance plan can be obtained directly from an insurance broker. This enables you to have a superior plan at a lower cost.


Three main types of Mortgage Insurance Plans offered:


Mortgage Life Insurance is designed to insure the outstanding mortgage balance at the time of the insured’s death.

The insurance coverage is directly related to the mortgage. The insured’s beneficiary does not see the money. If the mortgage borrower (or the insured) were to pass away while the mortgage insurance was in force, the coverage will pay off the outstanding balance of the mortgage. The majority of lenders who offer Mortgage Life Insurance have a $750,000 maximum cap on coverage.


Mortgage Critical Illness Insurance or Living Benefit can protect you in case of major illness.

Usually, it only covers:

  • Cancer
  • Stroke; and
  • Acute heart attack

If the insured is diagnosed with any of the three illnesses and survives the waiting period, the insurer pays off the outstanding balance of the mortgage (up to a maximum amount).

This is very basic critical illness coverage.


Mortgage Disability Insurance replaces the mortgage payments (up to maximum amount) in the event the borrower(s) become disabled due to covered medical condition. Similar to the Mortgage Life and Mortgage Critical Illness insurance, Mortgage Disability is a very basic plan.

How It Works:

  • The Mortgage Insurance is established based on the initial amount of mortgage.
  • Mortgage Critical and Disability Insurance can only be added as a supplemental coverage to Mortgage Life Insurance. Usually lenders don’t offer CI and Disability coverage without Mortgage Life Insurance.
  • If the Mortgage is jointly owned, then the coverage is set up as ”Joint First-to-die Death Benefit” coverage. 
  • The borrower(s) (or the insured) pays the lender the monthly premiums for the insurance. In return, the coverage is in place to cover the outstanding mortgage balance (up to a maximum). 
  • Many lenders, such as RBC Bank, use a third party insurance company such as Canada Life, even though they have an in house insurance department. 


The majority of lending institutions offer mortgage insurance protection to their clients. Usually, the coverage is obtained at the time of signing the loan documents.


Many Canadians are under the wrong impression that all mortgage insurance plans are relatively the same – and since the lending institution is offering them the best mortgage rates, the insurance plan must be competitive as well.


It’s important to know what kind of coverage you have and what plans are available.

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How to know which term life insurance option is right for you?

How to know which Term Life Insurance option is right for you?

Term Life Insurance Options

When it comes to term life insurance you have a lot of options. Let’s talk about your options and what makes the most sense. 

Term life insurance has several options. 5 Year terms, 10 year term, 20 year term and 30 year term. All that means is you know EXACTLY how much you will pay and what coverage you have for that time period. Simple to understand. 


Here’s some tips to look out for:

5 Year term is not a good choice. When you compare 5 year term and 10 year term, it almost the same price. It makes more sense for you to pay the same amount for 10 year term than pay for 5 years and then have your rates to go up. This is one of the reasons most companies do not offer a 5 year term anymore. 

Term 10 is the most affordable option for you today. That being said you need to factor in how long you will need the coverage. For example, because rates go up at year 10 if you factor in the higher rates and you need the coverage for 20 years it no longer is the most cost-effective option for you.

Term 20 work like a term 10 policy. The only difference is you are guaranteed a longer time. 

But let’s look at a term 30 policy. Because they start to act a little differently. Some term 30 polices have added benefits that other policies don’t. Years 16-20 of a term 30 policy has three options you.

  • Cancel your payments and get a reduced coverage for the remainder of your term 30
  • Cancel your payments and get a small amount (typically around 15-30k) of coverage for the rest of your life
  • Cancel your payments and get a small amount of money back


All the options are available for you. Yes, a term 30 will cost you more per month then any other option, however, if you are looking to cover a 25-year mortgage term 30 offers you a lot more than the other options. 

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What should you look for when buying life insurance?

What should you look for when buying Life Insurance?

As I write this we are currently faced with a global pandemic, COIVID 19. This has caused a lot of concern and misconceptions around purchasing life insurance. So this article is to clear up any misconceptions. 
 
How to purchase (since COVID-19 happened) 
 
With COVID 19 most of us have been limited to staying in door, however this doesn’t hinder your chance at applying for life insurance. If you are currently looking for life insurance and not sure where to start I have good news. Insurance is easier to purchase today then ever before. 
 
Insurance companies are offering easy non face-to-face applications. Depending on the coverage amount you are looking for most companies range from $25,000 to $1,000,000 of coverage without having to meet with an advisor. Some of these companies even offer Guaranteed issue policies with only a few medical questions you need to answer. 
 
Is it too late? Life insurance in your 40s and beyond
 
Is it too late to get life insurance at this point? This depends on your insurance company and the policy you intend to purchase. Some insurers have policies with age limits that can range from 60 to 85. Working with a broker will give you access to any policy in Canada. This would include policies you can purchase past the age of 60.  The pricing change depending on your age, but as long as your health doesn’t impede your ability to buy life insurance, it may still be available if you need it. 

  

What type of life insurance do you need when you’re middle-aged? 
 
At this stage of your life, if you’re not still carrying a mortgage or other debt you may be paying more attention to retirement or estate planning. So, you most likely need more financial stability and protection. Typically we recommend looking into permanent life insurance for the following reasons:  
 
  • Depending on your policy, your insurance costs may stay level.
  • The plan might let you pay for a limited time and then never again. Similar to a mortgage eventually you pay it off and own the coverage forever. 
  • It gives your family or other beneficiaries a tax-free lump sum payment after you pass away.
  • Some permanent policies generate dividends, which you can use to increase the death benefit or cover your premium payments. 
 
But what if you’re thinking about purchasing term life or renewing your current term policy? (later in life) 
 
Term life insurance is great when you’re just starting out because of the low cost, but it can become pricey as you move through different stages of your life. Every time you renew your term, the price goes up, because you are that much older. As you move into your 50s and 60s, those price increases a significant amount.
 
It’s not financially ideal to be paying more than necessary in your retirement years.  
 
In short, it’s good to note that insurance companies are still looking for new clients. They are not only looking for clients but they are making it easier for people to purchase life insurance regardless of your age. 

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The Easiest Way To Get Life Insurance Quotes In Canada

term life insurance by tip services in richmond hill

The Easiest Way To Get Life Insurance Quotes In Canada

Let’s break this down into 2 sections

1. How to get term life insurance quotes

Getting the quotes is the easy part. You start by utilizing free resources like TIP services FREE quote tool. It allows anyone to find rates shop different products and get a sense for what’s out there.

Many insurance companies let you get quotes online. Ask yourself, are you getting the best a company has to offer or the best the market has to offer. You see these companies below:


Which company has the best Term Life Insurance Quotes?


They all have the best policy in the right situation. Rates and policies details change. Based on your age and health status Manulife might have the best policy today but it might be Sunlife tomorrow.

2. What to look out for

First, the product. You see not all term life insurance is created equal. Some policies may be cheaper than others but they may also lack the ability to convert into a permanent life insurance policy. Depending on your reasons for purchasing life insurance this may be something that drastically impacts you in the future.

Many clients will look for a Term 10 option as it will be the most affordable option for you today but maybe more costly depending on how long you need the coverage. Let’s run through an example.

A $500,000 Term 10 policy might only cost you $25.41 a month compared to a $31.66 Term 20 policy. That’s a great deal, right? Well, that depends on how long you need the coverage. You see, a Term 10 policy guarantees your $25.41 will NOT go up for the first 10 years of owning the policy. At year 10 the policy renews based on your new age (10 years older). That same policy would cost $56.10 a month going forward. Now if you need the coverage for 20 years (let’s say to cover your $500,000 mortgage) it would actually cost you more to own the term 10 based on simple math.


Term 20 total cost to own

$31.66/month x 12 months in a year x 20 years of owning = $7,598.4

Term 10 total cost to own for 20 years

$25.41 x 12 month x the first 10 years of owning the policy is $3,049.20 the second 10 years would be $56.10 x 12 months x the second 10 years of owning this term life insurance policy is $6,732. Meaning the total out of pocket to own a Term 10 policy for 20 years is $9,781.2.

Would you rather pay $7,598.4 or $9,781.2 to own the same amount of coverage for the same amount of time?

Second, sales agents that care more about their commission then the policy you relieve apply for. The main reason we created TIP SERVICES was just that. We wanted to hire advisors who were paid salary and not commission. We believed this would take the pressure off them and in turn our clients would receive the policy that best suited them.

As you could see in the example above that there are times to recommend and own a term life insurance policy where the cost to own may look higher today but is less in the long run. The only time a term 10 option would be the one an advisor should recommend is if the client needs the coverage, but can’t afford the higher amount today.

Third, the company they represent. You see when you meet with a Canada Life representative they are going to offer you the best Canada Life has to offer. But not necessarily the best the market has to offer.
That’s true for any company that only has access to one or two companies.

So who can you trust? Well I mentioned TIP SERVICES is there for you. We have advisors that are working solely on salary. That’s regardless of their commission. As of now, they are only in Canada.

What is Permanent Life Insurance?

What is Permanent Life Insurance?

Permanent Life Insurance is designed to be there whenever your time is up. 
Permanent life insurance products, although more expensive offer level costs for as long as you own the policy. 
Some permanent products also over what’s called a “cash surrender value”. Which is like a forced savings account. Simply by paying your premium, your cash surrender value will grow over time, which you can access at any time TAX-FREE. 
 
 

Types of Permanent Life Insurance 

Term insurance typically comes in:

  • Term to 100 
  • Whole Life Insurance 
  • Universal Life insurance 
Term to 100 is easiest to understand. You have a specified amount of coverage (let’s say $1,000,000) with level cost so you never have to worry about increased rates. What you purchase is what you get and it lasts to age 100. 
 
The second type of permanent life insurance is whole life insurance. Just like Term to 100, whole life has a level cost to own this type of policy. The difference is whole life insurance has a cash surrender value (CSV). CSV is a cash account that increases guaranteed over time and is an asset you have access to while you are alive.  
 
The last is Universal Life which has many options available, these policies can be adjusted (to some degree) to benefit the client. They have a cash value to them as well, the difference Universal Life cans a variable to their investment vehicles, which means you could make more money, or you could lose money, depending on how the investment performs. 
 

Who Has The Best Permanent Life Insurance: 

When buying whole life insurance there are always a few factors that come in to play to which company has the best term insurance. 
 
  • Your age
  • The Coverage amount
  • The length of coverage
  • Health 
  • If you want a policy that can be converted into a permanent insurance coverage The companies performance (potentially) 

In short, no one carrier is the best. It becomes dependent on your situation. Line up your insurance needs with the right carrier. 
 
For help on finding the best coverage for you click the link HERE for your FREE Quote and we would be happy to help!

What you need to know before purchasing Term Life Insurance

What you need to know before purchasing Term Life Insurance

Term Life insurance is an easy and affordable option for owning Life Insurance. Term offers a level coverage amount at a set cost for a specific time. 
 
For Example: 
Sally can get $500,000 of life insurance for 20 years at $42.23 a month. So she knows her family is protected and her rates won’t go up. 
 
 

Types of Term Life Insurance 

Term insurance typically comes in:

  • Term 10 
  • Term 20 
  • Term 30 
  • Level to 75 (or 65)  
  • Term 100. 
Term insurance is the most affordable coverage options. 
 
For example: 
If Raj owns a Term 30 policy he knows the amount of coverage and his cost to own the coverage will not change for 30 years. At the end of 30 years, his rates will renew based on his new age. Thus making his coverage more costly.
If you are a couple in your 30’s looking for affordable life insurance Term 30 could be the perfect fit to protect your family.
 


Who Has The Best Term Coverage 

When buying term insurance there are always a few factors that come in to play to which company has the best term insurance. 
 
  1. Your age
  2. The Coverage amount
  3. The length of coverage
  4. Health 
  5. If you want a policy that can be converted into a Permanent Insurance coverage  

In short, no one carrier is the best. It becomes dependent on your own situation. But CLICK HERE for you free quote today!

Whole Life vs Term Life Insurance

Whole Life vs Term Life Insurance

So often I get asked Whole Life vs Term Insurance, which is best? The answer is BOTH. But, you need to learn which is right, in which situation. Let’s break this down for you in an easy to understand way.

The best way to look at whole life insurance or term insurance is this;

“Think of term insurance is like renting an apartment, when whole life insurance is like owning a house”


Term Insurance

Term insurance (like renting) is the most affordable option. And it’s great for people who know they do not want coverage forever. The benefits of term insurance are

1. Cost – Most affordable option of life insurance

2. Coverage – How much protection your loved ones receive if you were to pass away.

3. Term -typically range from 10, 20, 30 years. This means your cost to own and the coverage about will not change for the length of the term.

At some point, if you stop paying and have not filed a claim, you walk away from your policy with nothing to show. Kinda like renting an apartment. All your rent cheques were paid, but you don’t have anything to show for it.

For more information on Term, you can read our article by CLICKING HERE. Or check out our buyers guide HERE.

Whole Life Insurance

Whole life insurance is more like owning a house then renting an apartment. This is a little more expensive but will give you these benefits:

1. Level cost – Cost to own this coverage will stay level forever. Never increase, some plans will allow you to pay for 10-20 years after which you can stop paying and own the policy. This is similar to your mortgage, eventually, you pay off your mortgage and you own it.

2. Level or increasing benefits. Like your property increases in value, so does some life insurance plans. With whole life insurance specifically, your plan will increase at a GUARANTEED rate, without ever decreasing.

3. Cash value – yes these policies can make you some money that you can access while you are alive. This is called a cash surrender value. The cash surrender value increases year over year at a minimum rate. This can be used by you for any reason.

For more information on Whole life insurance CLICK HERE to reach more.

So this often leads to which one for you?

Well, if you are looking to cover something temporarily. Like a mortgage, you hope to pay off one day, a business loan or just coverage until your children are grown and out of the house, term insurance might be your best bet.

If you prefer to have something regardless when you pass away whole life might be a better fit. It’s always best to meet with an advisor and figure out which is best for you.

Our last pro tip is that you can mix and match. Some people will purchase a base of whole life and layer term on top.