Let's talk Term Life Insurance: A financial safety net for the future
The best part? It’s not going to break the bank. It can be surprisingly affordable, and you can customize it to your liking with coverage amounts and how long you want the coverage to last (the length of the term). When your needs change, there is also the option to exchange the policy for a longer term. It's a smart move for your financial game plan!
Term Life Insurance helps give you peace of mind knowing your loved ones are covered. If something happens to you, they'll receive a lump sum payment to cover expenses and debts. It can provide crucial protection for your family.
How much Life Insurance do you need?
Term Life Insurance is designed to provide coverage for a specific amount of time, so you can buy what you need, as your life changes. Often, people choose a term that matches how long it takes to achieve a specific financial goal. For example, if your mortgage will be paid off in 20 years, a 20-year policy will help to ensure that your loved ones aren’t left with mortgage debt if you were to pass away.
When deciding how much is right for you, think about what outstanding debt might be left after passing, along with ongoing and future expenses your family will face. Add on the cost of a funeral or end-of-life expenses and you have a decent idea of what the right amount might be. The average amount of Term Life Insurance per household in Canada is $458,000 (1), but many people choose to purchase a different amount based on their needs.
Here are a couple of examples:
Let’s say you’re 30, and you have no large family obligations. You can purchase a 20-year Term Life policy that pays your loved ones $50,000 if you pass, for $9.90 per month (2). This amount is likely enough to cover any final expenses and maybe a small loan or debt, such as credit card debt or a car loan. Because you’re still young, you may be able to take advantage of a lower price for 20 years.
Now, you’re 45 years old and have a family. Buying a $500,000 policy makes sense as this amount can help cover some of the larger costs of having a family such as paying off a mortgage or childcare costs. It can also be used to cover future expenses, like your child’s college or university tuition. The policy in this case will cost $29.25 per month (3).
How difficult is it to get a policy?
Great news, applying for Term Life Insurance can be easy and hassle-free. In about 15 minutes, you can have peace of mind. It’s possible to apply online without medical exams, or lengthy questionnaires.
Term Life Insurance is a smart move. It's affordable, customizable, helps provide financial protection and it’s designed to fit your needs. Be proactive and help make sure you’re covered for life's unexpected twists.
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products, or services is expressly given or implied by RBC Life Insurance Company or its affiliates.
(2) Rate based on a $50,000, Term 10 policy for a female, age 30, non-smoker. - Quote obtained from RBC Life Insurance Company on July 25, 2023.
(3) Rate based on a $500,000, Term 10 policy for a female, age 45, non-smoker. - Quote obtained from RBC Life Insurance Company on July 25, 2023.