Learn about life insurance.

LIFE INSURANCE: it pays a lump sum benefit when the insured person passes away.

DISABILITY INSURANCE: pays monthly benefit when the insured is disabled due to an accident or an illness.

CRITICAL ILLNESS INSURANCE is a lump sum benefit payable 30 days after a diagnosis with cancer, heart attack, stroke, Alzheimer’s disease, multiple sclerosis and a few other conditions (the list of covered conditions varies from 3 to 25 depending on the provider and the type of contract).


The contract has no expiration date, you are covered for life. Such contracts are the Term-100 contract, Universal Life and Whole Life contracts. The TERM-100 contract is a pure insurance contract  payable to age 100. The premiums are level and guaranteed for life. The UNIVERSAL LIFE contract is composed of a term-100 account and an investment account. Investing under the contract is tax-free to the specified by the contract limits. The WHOLE LIFE contract pays dividends from the company’s profit back to the policy. The dividends can be used to increase the permanent insurance amount or to purchase a one year term insurance. The contract also has a cash value account.

Read more about permanent life insurance:


TERM-10, TERM-20 and TERM-30 contracts cover you for the specified term only(10 years, 20 years or 30 years coverage period). Most of the contracts are renewable, which means you can continue using the product for subsequent terms after the initial term expires. The cost increases at every renewal. Most of the contracts expire at age 80 or 85. Usually term contracts can be converted to a permanent life insurance before a specified age in the contract age.


Advantages of the permanent life insurance:

  • The coverage is in effect for life
  • It should be seen as an investment for the next generation
  • Can be used for estate planning and tax planning purposes
  • It has numerous tax and succession planning applications in business environment
  • It can be used an an investment planning tool

Advantages of the term life insurance:

  • It is affordable
  • It allows for more adequate family protection in the early years of the family life when the need of life insurance is high and the budget is restricted
  • It can be converted to permanent life insurance in later years
The life insurance carriers have unified accros their sales channels prices. Most of the insurance companies sell primarily through agents and brokers. The price of a specific insurance product is the same for all agents/brokers.

Life insurance and critical illness insurance prices are based on age, gender and smoking status. Disability insurance prices factor in also the occupational risk.

Most of the insurance products would require that you go through an approval process that evaluates your health and life style related risks. If you do not fit the criteria for the regular prices, the insurance company can offer higher (rated) price, can exclude specific risks as not covered, or can decline coverage.

For life insurance products some companies offer discounted prices based on health. These prices are often called Preferred Health and Elite Health prices. They are available as information from all agents/brokers, but are given by the insurance company only if you satisfy the health and life style criteria for them.


Most of the life insurance contracts require that you go through some kind of risk evaluation, an approval process, called underwriting. In its most basic form it would include a medical and personal questionnaire. For larger amounts and higher age it would also include blood and urine tests, ECG, medical files and even more. The contract approval is subject to the evaluation of the collected information. The approval process can continue from one-two weeks to two-three months.


The contract is approved based solely on the answers you provide on a medical questionnaire. Most of the questionnaires are with closed-ended questions (YES/NO questions) and approval/decline decision is issued immediately. These contracts are generally more expensive than the traditional fully underwritten contracts. Some of guaranteed issue contracts come with a higher number of exclusions and limitations.

The most important obligation of the agent/broker is to help you estimate your insurance needs and advise you and inform you on the suitable to your needs insurance solutions.

A typical insurance contract would be anywhere from 30 to 120 pages long. It is a complicated contractual relationship governed by the regulating law, by the contract clauses and by the specific administrative rules of the insurance company.  That is why the insurance industry regulating bodies in Canada require the involvement of a licensed professional in the sales and servicing process.


Life insurance is a long-term contract. Mistakes, made in the process of selecting and acquiring the right coverage can be very costly and are usually detected years after the purchase. That is why choosing a trustworthy and knowledgeable insurance specialist as a servicing advisor is crucial for the financial security of your family/business.

When deciding on who to work with, ask these questions:

  1. Do you feel you can trust him/her?
  2. Does he/she understand your needs and concerns? Is he/she a good listener?
  3. Has he/she asked you to go through a detailed needs analysis covering life, disability and critical illness insurance?
  4. Is he/she knowledgeable?
  5. Does he/she offer alternative solutions and explains them well?
  6. Does he/she represent multiple companies?
  7. Has he/she properly disclosed any conflicts of interests and how he/she is paid?
Insurance is about having your family properly protected. When you take insurance with your mortgage, you have to consider a few advantages the personal life insurance has over the mortgage insurance plan with the bank:

  • The personal life insurance is a guaranteed product. The insurance company cannot modify the coverage and the price;
  • The personal life contract pays directly to your family. The mortgage insurance pays to the bank;
  • The personal life insurance is not affected when you change mortgage providers. If you are insured with a mortgage insurance, it would be negotiated every time you change lenders;
  • The personal life insurance is usually for a longer term than the mortgage contract;
  • The personal insurance is with a fixed coverage amount, while the mortgage insurance plan is with a decreasing coverage amount equal to the outstanding mortgage balance;
  • The personal term life insurance is renewable (you can keep it for a subsequent term) and it is also convertible to a longer term or to a permanent insurance contract. The mortgage insurance cannot be modified;
  • The personal term life insurance in many cases would be more affordable than the mortgage life insurance.
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