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Do I Need Life Insurance as a New Canadian?

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New Canadian or not – everyone needs life insurance. If you’re new to Canada and already have life insurance from your home country, then you understand the value of this sort of protection. Great!

But here’s the thing: If the plan is to live in Canada indefinitely, you may want to complement your existing policy with one that takes into account your new Canadian lifestyle and address. Not to mention, experts recommend that we review our life insurance coverage every five years or after experiencing a major life event – like a move to another country – so now may be the perfect time.

And of course, it would be helpful for your beneficiaries (i.e., the person(s) you choose to receive your life insurance payment in the event of your death) if the insurer they are dealing with is located in their time zone and speaks their language.

Is life insurance in Canada different from other countries?

In general, life insurance doesn’t differ that much from country to country. But it still doesn’t hurt to understand what life insurance in Canada entails.

Multiple types of life insurance

Canada offers various types of life insurance, including term life, whole life, and universal life insurance, similar to many other countries. Term life is the most popular, providing coverage for a specific period.

Eligibility criteria

In Canada, most life insurers require a medical exam or health questionnaire before providing coverage. This helps determine if you are eligible for coverage, as well as how much the the policy will cost. Some countries may have a different process for determining eligibility.

Regulation and oversight

Canada has a highly regulated insurance industry, with each province and territory having its own regulatory authority. This helps ensure that you – the consumer – are protected.

Coverage for critical illness

Many Canadian life insurance policies offer riders (i.e., additional optional benefits that can be purchased to further customize a life insurance plan), or options for standalone critical illness coverage. This type of coverage can provide financial support if you are diagnosed with a severe illness and cannot work as a result.

Tax benefits

Canada provides tax advantages for certain life insurance policies, such as the tax-free nature of death benefits (i.e., a payment made to designated family members or other loved ones). These benefits can differ from the tax treatment of life insurance in other countries.

Group insurance

Group life insurance policies are common in Canada, often provided by employers as part of employee benefits packages. This is similar to many other countries, where employers may offer life insurance coverage. Keep in mind that this type of coverage is only available while you are employed by that company.

Estate planning

Life insurance is often used in Canada as a tool for estate planning to cover estate taxes and ensure beneficiaries receive the intended inheritance. Other countries may have similar estate planning uses for life insurance.

Insurance providers

Canada has a mix of domestic and international insurance providers. It’s essential to compare policies and providers to find the best fit for your needs, much like in other countries.

Is life insurance covered by Canada’s public health system?

No, life insurance is not covered by Canada’s public health system. Only medically necessary health care services, such as doctor’s visits, hospital stays, and certain medical procedures, are covered by Canadian health care. Our health care system is funded by taxpayers, and is designed to ensure that all Canadian residents have access to essential medical services without having to pay out of pocket.

Life insurance, on the other hand, is a private financial product offered by insurance companies and member-based organizations. Life insurance policies provide a payout to beneficiaries upon the death of the policyholder, and are not related to health care expenses or medical treatments.

(Although… did you know that a beneficiary may choose to use this money to help pay for their deceased loved one’s medical treatments or respite care if they weren’t covered by public health? And in the case of a terminal diagnosis, some life insurance policies may provide up to 25% of the death benefit to help pay for these types of expenses? Learn more.)

Am I eligible to buy life insurance as a new Canadian?

Yes! New Canadians, including permanent residents and international students, are generally eligible to buy life insurance in Canada. Life insurance is typically available as long as you meet the insurance provider’s requirements.

Here are some other criteria to consider:

Age and health status

The eligibility for life insurance often depends on your age and health. Insurance companies may require applicants to undergo a medical exam or answer health-related questions as part of the underwriting process. After age 85, most life insurers will no longer offer coverage.

Financial status

Life insurers have strict rules in place to ensure those with ulterior motives do not take advantage. The amount of the death benefit (i.e., a payment made to designated family members or other loved ones) directly relates to how much money a person has while they are living (e.g., salary + assets). So if an individual has zero assets and an annual salary of $50,000, for example, an application for $5 million in coverage would be denied.

Residency status

You must be a legal resident of Canada to purchase life insurance from Canadian providers. Temporary residents, such as international students or temporary foreign workers, who are legally residing in Canada on a student or work visa are generally eligible to apply for life insurance coverage, as long as they’re applying 3-6 months* after landing on Canadian soil. Convention refugees (i.e., refugees that have been accepted by the Immigration and Refugee Board of Canada) are also eligible. Note that insurers will also take into account whether or not you intend to stay in Canada permanently (e.g., are you applying for permanent residency?) when considering your eligibility.

*dependent on life insurer

What is the average cost of life insurance in Canada?

Canada has a competitive life insurance market with numerous insurance providers offering a variety of policies. New Canadians can explore different insurers and types of policies to find the coverage that suits their needs and budget. Let’s look at two of the most popular types below:

Term life insurance

Term life insurance is typically the less expensive option because it has an expiry date. So if you purchase Term 10 life insurance, for example, and do not pass away during this time frame, the life insurer will not provide a payout. This lowers the risk to the insurance company and results in more affordable premiums (i.e., the amount you pay for an insurance policy). The cost is based on your age, gender and health.

Permanent life insurance

Permanent or whole life insurance costs more because there is a payout is guaranteed at some point in the future. The good news is, once the policy is paid for, it stays in effect for life. It. Plus, this type of coverage includes a way to generate investment growth and can pay for itself in estate tax savings.

A general rule of thumb, the cost of life insurance will be less if you are: (a) female, (b) a non-smoker, (c) in good health, and (d) relatively young.

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How do I buy life insurance in Canada?

Before you buy, make sure to seek advice from an insurance professional or financial advisor. The right advisor can help you understand your options, navigate the process, and select the most suitable life insurance policy for you and your loved ones.

One of the best ways to find life insurance is through a referral from a trusted friend or family member, so you may want to start by reaching out to members of your community first.

Did you know? Many insurance companies in Canada offer services and documents in multiple languages to accommodate new Canadians who may not be fluent in English or French.

What should I consider as a new Canadian when buying life insurance?

Eligibility

Ensure that you meet the eligibility criteria set by insurance providers in Canada. This includes factors such as age, residency status, and health.

Policy coverage

Determine how much coverage you need. Consider things like your family’s financial needs, any outstanding debts, and future expenses, such as education costs for your children.

Term length

If you’re considering term life insurance, choose the length of the term carefully. It should align with your financial goals and the period during which your family may need financial protection. For example, if you have a mortgage of 25+ years, term 30 life insurance may be the best option for you.

Policy riders

Explore any additional optional benefits that can be added to your policy, such as critical illness coverage or disability riders, if they align with your needs.

Payment method

Determine the best payment schedule for you. Will you pay monthly, quarterly, or annually?

Premium costs

Life insurance premiums can vary based on factors like your age, gender, health, smoking status, family history, occupation, lifestyle, and policy type. Get a quote online.

Medical underwriting

Your health and medical history can impact the cost of premiums, so be prepared to answer some personal questions during the underwriting process. This process may include a medical exam and a series of health-related questions.

Beneficiaries

Decide who you would like to receive the payout in the event of your death. Would you like to split it between loved ones and a charitable organization you support? Ensure their contact information is accurate and up to date.

Your changing needs

Periodically review your life insurance policy to ensure it continues to meet your changing needs and make updates if necessary.

How does Serenia Life do life insurance differently?

Accessible pricing

When it comes to pricing, Serenia Life regularly reviews its product pricing to ensure their life insurance is accessible to everyday Canadians – whether they were born here or are new to our country! For example, our term products are priced so competitively that they fall in the top 5 best prices in Canada. Plus, we offer a Term Conversion Credit program, where you actually get money back if you convert your term policy to whole life within the first five years.

Support for grieving loved ones

We also provide support for grieving loved ones by providing them with a fast and efficient Claims process, a $1,000 Bereavement Counselling Benefit for beneficiaries, our Coping with Loss column (written by a mental health professional), and a compassionate team of advisors.

Simple human kindness

Serenia Life is on a mission to prove a life insurer can be kind. And as a member-based organization, we share a portion of our profits with the communities we serve. How? By organizing in-office fundraisers, directly donating to worthy causes, and by providing a growing collection of benefits that help support a member’s family, their community, and the causes they care about.

Ready to purchase life insurance with Serenia Life? Fill out this short form and one of our friendly advisors will be in touch to schedule a free needs analysis.