LIFE INSURANCE
TERM LIFE INSURANCE
PERMANENT LIFE INSURANCE
CRITICAL LIFE INSURANCE
DISABILITY INSURANCE
HEALTH AND DENTAL INSURANCEAs we all know the future is uncertain. Despite hoping for the best, we must be prepared for the unexpected and unforeseen events. And, preparing for those unexpected events is essential. Life Insurance is a vital tool for securing your and your family’s future. By investing in a policy, you are taking proactive steps for your future. It not only offers financial protection in your absence but also ensures that your loved ones are cared for when you are not here. The relatively small investment in a life insurance policy pales in comparison to the immense peace of mind it provides.
Death Benefit Payout: Upon the policyholder’s passing, all life insurance plans grant beneficiaries a death benefit payout. The payout size hinges on coverage and policy type.
Premiums: Policyholders remit premiums to insurers for coverage. Amounts vary based on policy type, coverage, age, and health.
Cash Value Component: Permanent life policies accrue cash value over time through premiums and investments. Cash value can be used for loans or withdrawals.
Flexibility: Universal Life policies let policyholders modify premiums, death benefits, and cash value to suit changing financial requirements.
Term Life Insurance is one of the fundamental life insurance policies It provides coverage for a defined period like 5 to 30 years as opposed to Permanent Life Insurance Policy which provides lifelong coverage. If the policyholder passes away during this term, then the beneficiaries or their loved ones will receive a death benefit payout. However, the premiums are lower than other policies, but there is no cash value component.
Level Term Life Insurance: This is one of the basic types of Term life Insurance. You pay the same amount and if something happens to you, the payout is steady.
Decreasing Term Life Insurance: Over time, the payout gets smaller, but you pay the same. People use this to cover things like loans.
Increasing Term Life Insurance: The payout gets bigger over time but costs stay constant. It is for keeping up with rising prices.
Advantages:
It is easy to understand and not complicated.
The policyholder can choose the duration of coverage as per convenience and as per his/her budget.
It is a good option for people with a limited budget as it is more affordable than other types of Life Insurance.
It offers a tax-free death benefit to the beneficiaries.
Disadvantages:
Sometimes, the premium increases with time.
No cash value component over time.
It covers you for a specific period and if the policyholders remain alive during that period, then there is no payout.
Permanent Life Insurance gives lifelong coverage with a guaranteed death benefit if premiums are paid. It includes a death benefit and cash value component that grows over time. Cash value can be used for loans or withdrawals. Nonetheless, whole life insurance usually costs more than the term life insurance.
1. Whole Life Insurance
• Traditional permanent life insurance.
• Cash value can be borrowed or used for premiums.
• Lifelong coverage.
• Steady premiums.
• Fixed death benefit.
• Grows cash surrender value (CSV) over time.
• If surrendered before the insured's death, CSV minus charges can be received.
2. Whole Life Insurance
• Lifelong coverage with a fixed death benefit
• Generally lower premiums than whole life
• Usually, no cash surrender value
• Mature at age 100, with premium payments stopping then or upon earlier death, coverage persists till policyholders’ death.
3.Universal Life
• Like whole life, offers flexibility
• Adjusts premium and death benefit
• Builds cash value for premiums or withdrawals
• Basic premium plus extra deposits option available
• Minimum death benefit, adjustable.
• Choose investments for saving part
• Tax-sheltered savings add to the death benefit
• Affordable than whole life insurance generally
Advantages:
It provides lifelong protection to the policyholder if the premiums are paid.
It helps in building cash value over time which can be used for borrowings or paying premiums.
As death benefits are tax-free, it provides the tax benefits.
It gives access to a tax-free collateralized bank loan.
It also provides tax-deferred growth on your cash value.
It is helpful in tax-free estate planning.
Disadvantages:
It generally costs more than the Term Life Insurance.
It is a bit complicated to understand different types of Permanent Life Insurance.
Variable life insurance involves investment risk, the policyholder takes on risk and reward.
Ever thought about what might happen if a serious illness stopped you from working and earning money? How would you handle the medical bills, home expenses, or your kid’s education? Dealing with life-threatening conditions can be tough.
If these worries bother you, you might consider critical illness insurance. It gives you a lump sum of money if you are diagnosed with a critical health condition listed in the policy. This cash helps when times are hard like paying medical expenses, hiring caregivers, trying different treatments, etc.
The illnesses covered by these policies can be different depending upon the insurance company and plan selected by you. The most common ones are heart attacks, kidney problems, cancer, and major organ transplants. Some might also cover fewer common ones like multiple sclerosis. Some policies might have rules about waiting or surviving before you get the money.
Critical illness Insurance gives you money when you are alive whereas Life Insurance gives money to the beneficiaries upon the death of the policyholder. Unlike disability insurance, which pays a part of your income if you are not able to work, critical illness insurance gives you a lump sum amount of money regardless of your employment status. The amount of money that you get can vary depending on the company and the policy type. Usually, it is the amount that is written in the plan.
To receive this policy amount in case of critical illness, the policyholder must fulfill the criteria for diagnosis of the illness. It means the policyholder must undergo tests, provide medical reports to the insurance company, confirm the illness, and survive a defined waiting period which is typically 30 days.
Upon meeting the criteria of critical illness, the insurance company gives the policyholder a lump sum amount. The policyholder can use this amount for paying medical bills, treatments, or any expenses attached to the illness. But if the policyholder dies during the waiting period, then no amount is paid by the insurance company.
Critical Life Insurance is helpful for those people and families who are worried about money problems due to illnesses. It gives you financial protection during the rough time.
People who can consider Critical Life Insurance are :
- Those who have a family history of critical illnesses
- Work where disability insurance might not be enough
- Those who believe the lifestyle can affect their health in the long term
- Those who have lots of debts and think will face difficulty in paying if sick
Always remember critical illness insurance is not a replacement for any life insurance or disability insurance. Its always good to consider all options when you are planning your finances.
Disability insurance is a crucial safeguard that offers financial protection to individuals who find themselves unable to work due to unexpected health issues, illness, or injury. It helps to cover the living expenses, medical bills, and other financial commitments during the period they are unable to work.
In Canada, disability insurance plays a vital role in ensuring the well-being of individuals and families. Statistics Canada reveals that one in five Canadians aged 15 and above have a disability that restricts their daily activities. Moreover, the average duration of a disability claim is about three years, underscoring the need for a robust financial support system to manage theses extended periods of income loss.
If you think that you have enough financial resources, then consider the below:
• Savings might not last. 47% of the Canadians struggles with a week’s pay delay (Canadian Payroll Association survey)
• Other income might not cover. Employer and government benefits might not be enough or reliable.
• Disability expenses can rise. Medical treatments, assistive devices, and personal care might not be covered.
Disability insurance bridges gaps, providing steady income during recovery. It assures financial commitments are covered, letting policyholders concentrate on well-being. Disability insurance policies vary depending on the plan chosen and the insurance company but every policy covers some common features which are listed below:
- Definition of disability
- Benefit period
- Waiting period
- Benefit amount
1. Short-term disability insurance offers partial income replacement (3-6 months) for minor health issues.
2. Long-term disability insurance offers partial income replacement for extended periods due to serious illness or permanent disabilities, reaching a certain age or death of the disabled person.
Disability insurance can be purchased from different sources. Let us discuss.
• Employer: Group disability insurance offered by employers is convenient and cost-effective but may have limitations upon job departure.
• Professional association: Associations provide discounted group disability insurance, suitable for specific occupations, yet may share employer-plan restrictions.
• Insurance company: Insurance disability insurance via agents offers flexibility in coverage choice, though pricier and involving medical evaluation.
Disability insurance is helpful for those who are concerned about their financial struggles due to illness or injury-preventing work. It provides financial security and peace of mind to the insured.
Individuals who
- Have inadequate job disability coverage
- Are self-employed
- Have high debt
- Have a family history of disability illness
Please note Disability insurance is not a replacement for any life insurance or health insurance. Evaluate the insurance types while planning your finances.
Health and Dental insurance is a special kind of insurance that covers healthcare costs that are not fully covered by your provincial or territorial health plan. This includes medical, dental, vision, prescriptions, and more. It is for people without work insurance, like freelancers, part-timers, or retirees.
Your government health plan is helpful, but it only covers basic stuff like doctor visits and emergencies. It does not cover other important things like:
• Teeth care: Check-ups, filings, braces, and more are not usually covered.
• Vision care: Eye check-ups, glasses, and eye treatments are not often covered.
• Medicine: Some medicines might not be fully covered.
• Hospital stays: Private rooms or extra things like TV or internet cost more.
• Special services: Like physiotherapy, massage, or counseling may not be covered.
These costs can pile up and make money tight. Without insurance, you would pay with savings or credit cards. This affects your money plans. Individual health and dental insurance can help. It pays for costs your plan does not cover. It also lets you choose from more healthcare services and providers. It is a good way to keep your health and wallet safe.
However, the features of Health and Dental Insurance policy varies and depends upon the company and the policy type. But some common features are as under:
1. Deductibles: Pay this before insurance covers expenses
2. Coinsurance: Pay a percentage of costs after deductible
3. Co-pays: Fixed amount for covered items like doctor visits.
4. Max out-of-pocket: Highest yearly payment; once reached, insurance covers rest.
Let us discuss the type of Health and Dental Insurance plans. Although there are many types, some common types are discussed as under:
• Basic Plans: Covers common needs like drugs, dental, and hospitalization with higher costs for you.
• Enhanced plans: Offers broader coverage including paramedical services with lower cost for you.
• Customized plans: Tailor your coverage to match your needs and budget for more control
Health and dental insurance covers eligible medical and dental costs for the policyholder in return for premiums paid. To access coverage, policyholders must adhere to policy terms, including paying the required deductible, coinsurance, and copays. The insurer covers expenses until the maximum out of pocket limit is reached.
If there is a claim that is covered under your policy, follow the below steps to claim your expenses from the Insurance company:
1. Direct Billing: Medical providers send claims directly to the insurer on behalf of the policyholder. If approved the policyholder either does not pay upfront or covers the non-approved portion.
2. Reimbursement model: The policyholder pays for services and later submits expenses to the insurer. The insurer then pays according to policy coverage.
Expenses incurred by the policyholders are paid via two methods:
• Pay and get a receipt with details
• Fill claim form, and attach the receipt and necessary info.
• Send the form and receipt to the insurer
• Insurer reviews, verifies, and reimburses eligible amounts.
Health and Dental Insurance is one of the important types of insurance to be considered by those who are not covered by their employer’s health insurance plan and those who are self-employed, part-time workers, or retirees.
Consider Health and Dental Insurance if:
• There is a lack of coverage from employer-sponsored plans
• Incur significant medical or dental costs
• Have a family history of conditions requiring high expenses
• Worry about unexpected medical or dental costs
The type and coverage depend upon policy type and the company of Insurance so while planning for buying insurance consider your needs and requirements.
Purple Financial Services- your trusted Insurance Company in Canada is committed to providing top-tier protection.We are here to secure your today and tomorrow with the right insurance services.
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