There are several kinds of life insurance in Alberta, and one of the most commonly known is term. Today we will take a look at term life insurance, and what makes it so affordable.
What is term life insurance?
Term life insurance, unlike permanent insurance, is specifically designed to cover risks for a set number of years (aka, the term). You will commonly see this expressed as Term 10 (a 10-year policy), Term 20 (a 20 year policy), Term 30 (a 30-year policy), etc.
Why do people buy term life insurance in Alberta?
Like all insurance products, a term life insurance policy is all about transfer of risk. The simple fact is, there is a cost to dying. The loss of caregiver/housekeeper services if the stay-at-home partner/parent passes away means having to come up with money for child care, house cleaning, meal preparation and more. The loss of income from the family’s breadwinner(s) could mean having to sell the home, falling into debt or necessitating the caregiver to enter the work place (while coming up with funds for childcare and other household services). There is a tax return due for deceased individuals during the year of their death, not to mention debts they may have outstanding or contributions to important funds, like their children’s education.
Having a flow of income or household caregiving services suddenly stop is financially devastating for the majority of Albertans – who lead the pack in consumer debt in Canada. In addition to blowing past the Canadian average debt load by 30 per cent, the average Albertan carries a whopping average of $27,599 in consumer debt (that is, debt that does not include a mortgage). Now let’s add a typical mortgage on top of that, and the average Albertan spends $1,506 monthly just to service their overall debt.
As you can see, the typical Alberta resident could not withstand many unexpected financial blows. That’s where term life insurance comes in. It transfers the financial risk to a third party in exchange for a monthly premium.
Who can get term life insurance in Alberta?
The best time to get any life insurance product is when you are young and healthy, but most companies will insure individuals up to age 65-70 and provide coverage to ages 75-80. The risk of death rises with age, so insurers have age limits to mitigate the risk of paying out the policy. Those of advanced age have other options, however. No medical life insurance policies are a good option for seniors because they skip the need for a medical exam and are designed for those who have trouble getting traditional life insurance.
What type of term life insurance should you get?
The answer to what type of term life insurance is best for you is “it depends.” A broker will assess your risks, your future goals and your financial situation. For some, a term long enough to cover a new mortgage may be recommended; for others, a long-term policy with the option to convert and with additional riders, like critical illness insurance (pays a living benefit if you are diagnosed with an illness named in the policy) may be recommended.
You don’t have to go into the world of life insurance alone! Speak with a broker. Brokers, unlike company agents, are not working for any one company. They sell the products of any licensed carrier in their province, and they shop the rates on your behalf. They find the term life insurance in Alberta that is the best match for you and your family.