Deciding to purchase life insurance is a smart and caring one. It means taking control of your financial future and planning for your family’s needs. There are many options for life insurance, though, and you may be wondering where to start and just how life insurance works in Canada.
Read on to learn more about the life insurance process and the important points you need to know, then call us at Hometown Life Insurance for more information. We can help simplify the process.
The Life Insurance Process
The life insurance process in Canada is comprised of several steps:
Research Your Options
First, research your options when it comes to life insurance. Decide if you need it, and how much you will need. This is an important part of your financial plan, so you may want to work with your financial advisor or agent for guidance.
Different types of life insurance could meet your needs, so researching and understanding the different products available and their benefits can help you make an informed decision.
You may already have a policy from your employer or through your bank. These may be smaller policies, though, and so considering adding another life insurance policy purchased privately may augment your financial plan.
You may wish to discuss your options with your family and designated beneficiary to include them in the planning process.
Quote and Application
Once you have decided which kind of life insurance product to purchase, you will need to compare quotes and complete an application. The application process may differ slightly from carrier to carrier, and working with your agent can help to simplify this step for you.
Comparing quotes from different carriers is important to help you find the most competitive rate for your needs and personal situation. Make sure to read policy terms and conditions to understand any differences or essential points between the policies.
Once you have compared your options, you can make a decision and purchase your policy. Many carriers offer easy payment options such as autopay or Electronic Funds Transfer. You can often manage your policy online at your carrier’s digital portal or by working directly with your agent.
Renewals and Conversions
With most term life insurance policies, you can renew them when the term ends. You will likely pay a higher premium because you will be older at the time of renewal. Renewing your policy will require paperwork with your carrier. Make sure to review your insurance carrier’s instructions on how to renew your policy when it terminates.
Some term policies allow the policyholder to select their policy term and extend the policy on an annual renewal basis without additional underwriting at renewal. Canada has many options for life insurance, and more competitive policies are introduced often.
Many term life insurance policies offer the option to convert the policy to a permanent life insurance policy if you decide to convert before the deadline in your policy. This free conversion option can be beneficial if you change your mind about the type of life insurance policy you need.
Claims
After you have purchased your life insurance policy, share the details and contact information with your beneficiary, spouse, and executor. Your financial advisor or agent can help when it comes time to make a claim, making sure your family has the contact information for your agent.
Claims are easy to make against a life insurance policy. The beneficiary will need some basic information about the policy, such as the policy number and the insurance carrier’s name. This way, your beneficiary will easily know how to contact your carrier during a stressful time.
There are four steps to filing a life insurance claim:
1. Procure the Death Certificate – Generally, the funeral home director will draft and provide free copies to the family. This is necessary to begin a life insurance claim, so obtaining a copy of the death certificate is the first step in the claims process.
2. Contact the Insurance Carrier – The beneficiary may call the insurance carrier directly or contact the agent or financial advisor for assistance. The insurance company will be able to explain their claims process and any additional information they may need. If the beneficiary prefers, the agent can handle most of this step.
3. Complete the Claim – Each insurance company will have different procedures, and it is important to follow their directions when filing the claim. They may have deadlines or need additional paperwork before they can complete the claims process. Failing to follow their instructions could cause unnecessary delays. Much of this process, like uploading documentation, may be managed digitally through the insurance carrier’s website. Claims can take 30-60 days to be processed by the carrier once they have all the information.
4. Receive the Death Benefit – Once the claim is finalized, the insurance company will issue the death benefit to the beneficiary or beneficiaries. If there is more than one beneficiary, the death benefit is divided between the beneficiaries evenly or proportionally as determined by the will.
Suppose a life insurance claim is delayed or denied by the insurance company. In that case, there may be several reasons for the denial, like a lapse in payment of premiums, a lack of paperwork to support the claim, or misrepresentation on the initial application for life insurance. If the claim is refused, your agent can help guide the next steps.
Final Thoughts
With so many options for life insurance in Canada, it is critical to understand how it works. Your life insurance investment is important – make sure you understand your options. Whether you select a term or permanent life insurance, the process from quote and application to claim is similar.
We can help simplify your life insurance experience and educate you on the process along the way. Reach out for more information.
How do I Learn More?
To learn more about how life insurance works in Canada, contact the experts at Hometown Life Insurance. Our licensed experts will be happy to answer any questions you have.
External Links:
- https://www.canada.ca/en/financial-consumer-agency/services/insurance/life.html
- https://www.newswire.ca/news-releases/canada-life-launches-customizable-term-insurance-product-to-maximize-fit-and-flexibility-866165539.html
- https://www.canada.ca/en/financial-consumer-agency/services/insurance/get-insurance.html
