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While life insurance is not a mandatory coverage, it can often be a vital option and is typically obtainable for little cost. Canadians seek life insurance for peace of mind, such as to know loved ones are financially secure should the worst happen.
Life insurance in Canada can help your family cover bills in the event of your debt, cover funeral expenses, and provide monetary stability. In many cases, life insurance policies can be bundled with critical illness coverage to protect you financially through health problems.
While facing our own mortality is something we all want to avoid, knowing your family is protected can give peace of mind. Customers often think insurance solutions are expensive, an opinion usually influenced by the cost of auto insurance. In terms of life insurance, the cost of a policy is usually reasonable at worst and outright affordable at best.
Reasons for purchasing life insurance
- Income Replacement: Whether you live in a two income or single income home, the loss of your salary could be devastating to your family and loved ones. Life insurance helps by replacing lost income through the death benefit paid to your spouse. This pay-out is typically sufficient for your loved ones to maintain their current lifestyle.
- Expenses: Unfortunately, the sadness of dealing with death includes a huge financial burden on your family when you depart. Life insurance policies cover medical bills, burial costs, and funeral expenses, which can cost thousands of dollars.
- Mortgage Security: When a family income contributor passes, strain is often put on the remaining spouse in terms of paying outstanding mortgage balances. Life insurance can help cover those costs and ensure your family can pay off the mortgage.
Critical Illness (CI) Insurance
Unfortunately, critical illness is something many of us will have to face during our lives. Indeed, Canadians are more likely than ever to contract a critical illness, with statistics showing more people contract some major illness during their lives, and at increasingly younger ages.
Getting ill sadly comes with huge cost, whether from medical treatments (many of which are not covered by provincial health plans) and loss of earnings from missing work. Interestingly, Canadians usually ignore CI insurance, but the chances of getting a serious illness are higher than your home being destroyed.
Critical illness (CI) insurance is a policy in which the insurer will pay a lump sum cash payment when designated illnesses are diagnosed. Each insurance provider will have a predetermined list of illnesses that a policy covers.
It is worth noting that CI insurance is different for life insurance. More life insurance policies cover the policyholder in the event of death, while critical illness coverage can also protect against non-lethal illness. In fact, more CI policies require the customer to survive a specific number of days after an illness is diagnosed (the survival period). While companies vary their survival period, the average is around 30 days.
Most provinces in Canada have integrated health plans that cover customers costs in the event of health problems. However, in most cases the plans do not protect against some costs, such as prescription medication, dental hygiene, physiotherapy, and some treatments for critical illness.
To cover these added costs, insurance coverage is needed. Without protection, Canadians are forced to pay large sums of money for health and dental care. Health insurance is a supplementary coverage that can help you or a family member receive high quality care without leading to huge cost.
Individual health insurance plans protect both you the policy holder and family members for services and treatment not available through provincial health plans. Among the benefits usually found in a health insurance policy include ambulance services, paramedic access, hospital costs, dental coverage, and prescription drugs.