Choosing the Best Life Insurance Option for Your Needs

Estimated Time to Read: 3 minutes

Life insurance isn’t on the top of most family’s expense list, although it should be.  When it comes to investing in your loved ones’ future you want to make sure you get the best life insurance in Alberta for your needs, and you want it at the best price.

However, it’s important to note that the best price doesn’t necessarily mean the cheapest. A lot of focus rests on how much premiums are when choosing the best life insurance option. But, what is often forgotten is the importance of how life insurance is designed to suit individual needs.  Situations are never identical.

Although searching for the best life insurance in Alberta to fit your budget is important, choosing the right policy to make sure your loved ones are protected is just as important.  This is why you should always shop around and compare life insurance quotes from different insurance carriers.

There are two types of life insurance. One is term insurance and the other is whole life.  Below we’ll look at how they’re different to help you choose your best life insurance option.

Term Insurance Versus Universal Life Insurance

The best way to describe their differences is with an example.

Term Life Insurance: Let’s say you get a quote for a 5-year term life insurance policy for $500,000 coverage. If you pass away within the term your beneficiaries get the death benefit.  If you survive there is no payout. You can renew your policy, but the premium might be higher because you’re older and your health might have changed.

Universal Life Insurance: For the same amount of money spent on premiums for a term policy you could get a universal life insurance policy with $250,000 coverage. If you passed away your survivors would get a smaller amount, so it may not be the best option.

However, if you didn’t pass away the universal life insurance policy has a built in investment component.  So it would continue to build and if you kept up with your premiums, eventually you could borrow against it or take some of the cash with no penalties.  Additionally, you would have life insurance for the rest of your life regardless of your health.

Convertible Term Life Insurance Policy

With term life insurance you get a larger death benefit per dollar spent and sometimes this is more economical; particularly when you’re raising children.  However, it’s possible to get a convertible term life insurance policy.

This means you can convert it from a term to a universal life policy so you have a cash value asset (www.investopedia.com/terms/c/cash-value-life-insurance.asp) for retirement. After your children are grown, the death benefit amount doesn’t need to be as substantial.

The best life insurance in Alberta is one from a reputable insurance agency or brokerage.  Make sure to research your options and get quotes from more than one life insurance company.

What to Consider When Choosing the Best Life Insurance Option for you

There are number of things to think about with respect to the type and amount of life insurance in Alberta you need to protect your loved ones.  One way to help decide is doing a needs analysis.

Assets and Life Insurance

  • Cash on hand, GICs, RRSPs and other investments
  • Other disposable assets (cottages, rental property, farm or business assets)
  • Amount of existing life insurance policies (including personal insurance, mortgage insurance and group life insurance)

Liabilities and Cash Needs:

  • Total mortgage amounts owing – commercial/residential
  • Loans and debt totals
  • Final expenses such as funeral expenses, income and capital gains taxes, and income
  • Education fund
  • Child care expenses, aging parents, emergency fund amounts

Income Required by Survivors

  • Annual income needed to provide for your dependents – at least 70% of your current income
  • Number of years survivors will need the life insurance income
  • Annual rate of investment returns

As you can see, the best life insurance in Alberta is a policy that provides your family with the best insurance coverage for your unique situation, and at the best price for the type you need.

If you’re trying to choose the best life insurance option for your needs, or want to get the best life insurance in Alberta, please speak with an insurance broker.  The consultation is free and will help you discover what life insurance product best suits your family’s situation.

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