LIFE
INSURANCE

Protect your legacy

 

Life Insurance

Life insurance is one of the oldest coverage products that remains on the shelf today, and it is still as valuable as it was 500 years ago. Life insurance is a product that covers you for a set amount, which is paid out to the beneficiary of your choice upon your death. This payout is both tax-free and transacted in a lump-sum.

Life Insurance proceeds are commonly used towards:

  • Paying outstanding debts such as a mortgage or loans
  • Covering capital gains on a business or investment property when you pass
  • Replacing a portion of your income still needed by loved ones to maintain their current standard of living.

Author: Aaron Moser

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Life Insurance FAQs

There are typically 2 reasons why you may need Life Insurance.  IF you die,  and WHEN they die. 

IF you die, you may need insurance to pay off outstanding debts or replace your income for a loved one who may rely on it. 

WHEN you die, you may want insurance to pay taxes owed on a property that you’d like to keep in the family, or simply if you want to leave a legacy for someone or something close to you.

Term Life Insurance coverage has a specific start and end date. Rates are usually locked in and will remain the same over the length of the term (usually between 10 and 20 years). At the end of the term, the owner of the coverage will stop paying their premium and the coverage will no longer exist.  The need for insurance is short term and that need will one day expire. For example a 20-year mortgage, or replacing one’s income for a specific number of years.

Permanent/Whole Life Insurance coverage is usually purchased for a need that will never go away.  Such as capital gains owed at one’s death, or any other cash bequests for people or causes important to the deceased. It often comes with an investment component called “cash value” that grows tax sheltered inside the policy and can be accessed for various reasons throughout the life of the policy.

There is no perfect age to get Life Insurance. Certain major life events such as buying a home or having a child is a good time to look at personal insurance coverage.

A good way to think about when to get Life Insurance is if someone you care about would be affected financially if you were no longer around. As premiums are based on age and health, the risk of waiting is that you may have a change in health and could become uninsurable in the eyes of an insurer. Premiums will also be more expensive as you age.

Yes. Life Insurance without medical is a much simpler application process with fewer questions and no medical exam. The premiums are usually a little higher and the maximum benefit is often capped at a set amount.

Yes. Certain types of permanent insurance come with an investment component usually referred to as “cash value.”  Typically, this money can be withdrawn or borrowed from. Term insurance, on the other hand, does not usually have any cash values attached to the policy.

Yes. One of the most common purposes for purchasing Life Insurance is to cover a mortgage. Term Life Insurance is the most common type of coverage for this situation. 

this should not be confused with mortgage insurance that is offered by the lender at the time of purchase. Mortgage insurance is meant to cover the lender and will decrease over time. Term Life Insurance is meant to protect the homeowner and is usually much cheaper than mortgage insurance. 

For group insurance, the employer may deduct the premiums against business income as long as the premium payments are a reasonable business expense.  For personal coverage, the business owner may be able to deduct a portion of the insurance premium, if they were required to get the insurance coverage as collateral for a loan.

When Life Insurance is purchased in Canada, the policy comes with a two-year contestability period which goes into effect the day the policy is issued. If the life insured passes away within those two years, the Life Insurance company is allowed to review your coverage for anything you misrepresented during the application process. If the insurer is able to prove that the deceased misrepresented themselves, the claim will most likely be denied.

Usually not. Most Life Insurance coverage is considered a personal expense, and not tax-deductible to an individual or a business owner. However, If a lending institution requires insurance on the life of a business owner as collateral for a loan, there may the option to deduct premiums paid for the coverage.

The death benefit of a Life Insurance policy is paid out to the beneficiary tax-free.

(This is addressing Mortgage Insurance that is offered by the lender at the time of purchase).

Mortgage Insurance is meant to cover the lender and will decrease over time and your monthly premiums will remain the same. If you pass away, the money goes to pay off your mortgage and eliminate the risk to the bank.  Term Life Insurance is meant to protect the homeowner and is usually much cheaper than Mortgage Insurance.  If you pass away, the money goes to your family (not the bank) and they get to decide what to do with the death benefit.

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Aaron@TheReFrameGroup.com

Life Insurance

Life insurance is one of the oldest coverage products that remains on the shelf today, and it is still as valuable as it was 500 years ago. Life insurance is a product that covers you for a set amount, which is paid out to the beneficiary of your choice upon your death. This payout is both tax-free and transacted in a lump-sum.

Life Insurance proceeds are commonly used towards:

  • Paying outstanding debts such as a mortgage or loans
  • Covering capital gains on a business or investment property when you pass
  • Replacing a portion of your income still needed by loved ones to maintain their current standard of living.

Author: Aaron Moser

BOOK A CALL
Life Insurance FAQs

There are typically 2 reasons why you may need Life Insurance.  IF you die,  and WHEN they die. 

IF you die, you may need insurance to pay off outstanding debts or replace your income for a loved one who may rely on it. 

WHEN you die, you may want insurance to pay taxes owed on a property that you’d like to keep in the family, or simply if you want to leave a legacy for someone or something close to you.

Term Life Insurance coverage has a specific start and end date. Rates are usually locked in and will remain the same over the length of the term (usually between 10 and 20 years). At the end of the term, the owner of the coverage will stop paying their premium and the coverage will no longer exist.  The need for insurance is short term and that need will one day expire. For example a 20-year mortgage, or replacing one’s income for a specific number of years.

Permanent/Whole Life Insurance coverage is usually purchased for a need that will never go away.  Such as capital gains owed at one’s death, or any other cash bequests for people or causes important to the deceased. It often comes with an investment component called “cash value” that grows tax sheltered inside the policy and can be accessed for various reasons throughout the life of the policy.

There is no perfect age to get Life Insurance. Certain major life events such as buying a home or having a child is a good time to look at personal insurance coverage.

A good way to think about when to get Life Insurance is if someone you care about would be affected financially if you were no longer around. As premiums are based on age and health, the risk of waiting is that you may have a change in health and could become uninsurable in the eyes of an insurer. Premiums will also be more expensive as you age.

Yes. Life Insurance without medical is a much simpler application process with fewer questions and no medical exam. The premiums are usually a little higher and the maximum benefit is often capped at a set amount.

Yes. Certain types of permanent insurance come with an investment component usually referred to as “cash value.”  Typically, this money can be withdrawn or borrowed from. Term insurance, on the other hand, does not usually have any cash values attached to the policy.

Yes. One of the most common purposes for purchasing Life Insurance is to cover a mortgage. Term Life Insurance is the most common type of coverage for this situation. 

this should not be confused with mortgage insurance that is offered by the lender at the time of purchase. Mortgage insurance is meant to cover the lender and will decrease over time. Term Life Insurance is meant to protect the homeowner and is usually much cheaper than mortgage insurance. 

For group insurance, the employer may deduct the premiums against business income as long as the premium payments are a reasonable business expense.  For personal coverage, the business owner may be able to deduct a portion of the insurance premium, if they were required to get the insurance coverage as collateral for a loan.

When Life Insurance is purchased in Canada, the policy comes with a two-year contestability period which goes into effect the day the policy is issued. If the life insured passes away within those two years, the Life Insurance company is allowed to review your coverage for anything you misrepresented during the application process. If the insurer is able to prove that the deceased misrepresented themselves, the claim will most likely be denied.

Usually not. Most Life Insurance coverage is considered a personal expense, and not tax-deductible to an individual or a business owner. However, If a lending institution requires insurance on the life of a business owner as collateral for a loan, there may the option to deduct premiums paid for the coverage.

The death benefit of a Life Insurance policy is paid out to the beneficiary tax-free.

(This is addressing Mortgage Insurance that is offered by the lender at the time of purchase).

Mortgage Insurance is meant to cover the lender and will decrease over time and your monthly premiums will remain the same. If you pass away, the money goes to pay off your mortgage and eliminate the risk to the bank.  Term Life Insurance is meant to protect the homeowner and is usually much cheaper than Mortgage Insurance.  If you pass away, the money goes to your family (not the bank) and they get to decide what to do with the death benefit.

Load More

Ready for a Quote?

By completing our short online form, we can get to work right away without taking up any more of your valuable time.

SUBMIT YOUR INFO
Don’t want to wait?
Connect with us now.
Aaron@TheReFrameGroup.com

How We Work

Step 1

You tell us a bit about yourself

Step 2

We compare multiple quotes

Step 3

You get the best coverage

Life Insurance vs Mortgage Insurance

Hear from Aaron, our Life Insurance specialist, about why it makes more sense to include your mortgage insurance in your life insurance policy.

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Term Life Insurance

Aaron breaks down why term life insurance may make more sense if you have a young family or a mortgage.

VISIT OUR VIDEO LIBRARY

Permanent Life Insurance

Aaron explains why you should consider permanent life insurance for tax advantage charitable giving and estate planning.

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