Types of Insurance
In Canada, there are 4 main types of personal insurance you can purchase and each has its own benefit. Knowing what product is best for your needs can be confusing. Below is a list of the types of personal insurance and some information about them:
Life insurance – when choosing to get life insurance you are taking care of your family in the case of an unexpected death. Life insurance in a hard thing to think and talk about because most of us want to avoid the topic of death. A life insurance policy will ensure if something does happen to you your family will not be left with a financial burden.
There are advantages of life insurance such as:
- the death benefits are income tax free to the beneficiary upon your death
- you can easily access and withdraw funds on the cash value of the policy if you need emergency cash and it is tax fee
- you can choose to have your beneficiary or owner be a charity
The benefit to you is that ensures that your beneficiaries are not left with your debts upon your death and you can leave them with some money to maintain their standard of living.
There are a variety of life insurance policies that are available, Term Insurance, Permanent Life, Whole Life, and Universal Life Insurance. An insurance broker will explain these to you and help you to decide what is the right plan for you. Contact us today for more information or to set up a meeting with an insurance broker.
Disability Insurance – in the event that you become disabled and are no longer able to earn income disability insurance will replace a portion of your income. Disability can be the result of a serious illness, injury, or a mental illness.
The benefit to you would be that you can maintain your standard of living if you are disabled and not able to work.
Critical Illness Insurance – provides your family with financial security if you are diagnosed with a serious illness such as cancer, heart attack, stroke, etc. There is a short waiting time after diagnosis before you will receive the payment, it is typically 30 days. You can still receive this payment even if you are still able to work, it is a tax-free lump sum payment, this money is paid to you and has no beneficiary.
The benefit to you is that it will help cover additional costs that may incur during illness or can be used for any other purpose.
Long-Term Care – If you are worried about assisted living costs after the age of 65 this is an inexpensive option to easy your worries. If you are not able to perform 2 or more of the 6 daily living activates (bathing, dressing, eating, toileting, transferring or maintaining continence) LTD insurance will provide you with payments.
The benefit to you is that it will help cover the costs of long-term care so you don’t have to deplete your savings account.