Hi Guys, Welcome back! This is Thomas!
Better mindset | Better Life!
Back in 2019, a survey was conducted to see
how many Canadians are prepared for the unexpected
such as accident or pre mature death.
47% said if they don’t have the next pay cheque
they are not going to cover basic living expenses
in the following months
And 70% said they do not have plans for the unexpected.
Today I want to talk about the Term insurance in Canada.
One of the simplest and cost-effective way to protect your finance.
How they work and why is it important to know especially in times like this
if you are new to this channel,
this channel is about financial growth and tips that you can saved more in Canada.
If you like the video,
make sure click the subscribe button
and hit the bell down below
so you won't miss any important information.
As the name suggested,
Term insurance is to provide a temporary coverage not for the entire life.
There is term life insurance and there is term critical illness insurance.
Their job is to provide a lump of cash
in case of serve health condition
or early death for a certain period of time.
usually in 5, 10, 20 year until age 85
If you want to know more about critical illness insurance,
please check my last video
There are 2 benefits of having a term insurance policy
First is Income replacement.
No matter you are single or not
you will always have 4 basics needs:
Food, shelter, clothing and hobbies
And these are all funded by
either your active income or your passive income
If you cannot provide an income due to the unexpected,
and there is no or little passive income.
Who is going to support the lifestyle?
term Insurance in this case can provide the cashflow and
reduce the stress of payments until the crisis is over.
A lot of people think ‘I am young, I am healthy,
why do i need insurance now?’’
On the contrary, that is the best time they should get insurance
because the insurability can be lockdown.
The amazing thing for life and critical illness insurance policies in Canada,
the insurance company cannot change the policy’s term once the contract is locked.
There are 3 guarantees once the insurance policy is in place.
The first one is guaranteed premium,
which means the cost for the insurance policy has to be the same no matter what the future situation will be.
If I don’t smoke and approved for the non smoker rate
two years later, if I decide to smoke.
Insurance company cannot adjust my premium due to change in lifestyle.
Or if the claim is much higher due to the unexpected,
the insurance company cannot come back and say we need to adjust the policy premium.
Once the policy is in place, the cost is locked for that interval
The other one is guaranteed renewable.
Say my coverage is about to expire, if I choose to renew it,
insurance company have to renew the policy regardless of my health.
For example. John has a term 10 life insurance,
if he gets cancer at year 9 and survived.
He is going to have a hard time to get a new insurance policy.
But with the guaranteed renewable feature build in,
He has the option to renew for another 10 years until a certain age,
usually set at age 75 depending on each insurance company guide line.
The last guarantee for most of the term insurance policy is
guaranteed convertible.
the ability to convert to permanent insurance
regardless of your health
Take me for example.
When I was in my 20s.
I was single, young and healthy at that time.
Main purpose is not to create additional liabilities
to my family in case of anything
so I got myself a term life and ci insurance coverage.
Couple years later, I have my own family.
My goal has changed and to make sure
I can provide an income if I am not here.
And since my cashflow is better,
I converted the term insurance to permeant insurance.
So anytime in my life, I am protected.
Why is it important to consider term insurance in time like this?
Just like travel insurance or auto insurance,
term life and critical illness insurance provide a safety net,
transferring the risk to the insurance companies.
For a Canadian, non smoker,
for $500,000 life insurance and $100,000 ci insurance
it’s starts less than $50 dollars a month
And at any given time,
you can cancel, convert partial or full amount of the coverage
to permeant coverage regardless of health change.
using the lowest cost to get the biggest protection.
There are two channels that you can get life or critical illness insurance policies.
One is through financial instructions such as insurance companies.
It’s simple, easy. You can even get one online
The other channel is through insurance brokers.
The advantage is they have access to multiple
insurance companies so they can compare
and find the best plan
The process might be longer,
but the plan is tailor to what you need
and able to explain all the conditions.
In General, the price for each company’s term plans are very competitive.
What’s most important is to see
rather the term policy has guaranteed premium
and renewable features build in.
And In terms of convertible,
what kind of permeant products and benefits
are available within the same insurance company?
Please talk to your insurance professional and
I will put a link below so you can get a quick quote and leave questions there.
insurance is one of those things —
you will not learn how important it is until it happens
Thanks so much for watching this video!
If you find this video useful, please share it to your friends.
This is Thomas.
During this time please Take Care! Stay Well!
And i will see you in the next video!