If you’ve ever encountered trouble because of your age or health conditions when applying for life insurance, you’re definitely not alone. Advanced age is often a barrier, along with pre-existing conditions that may be tied directly to aging.
Thankfully, there are several life insurance options for seniors in Canada, many of which have higher-than-usual age limits and flexibility with health conditions. A whole life policy is one such option, and while it’s fantastic to start a whole life insurance plan in your younger years, there are additional benefits for older Canadians.
Here’s a closer look at whole life insurance in general and how it works well for different ages.
Along with term life insurance, whole life insurance is one of the most common and popular types of life insurance in Canada that business owners use. The major difference between the two is that while term life insurance covers you for a set amount of time, often Term 10, Term 20, or 30 years, whole life insurance covers you for a lifetime at a fixed premium rate.
With term life insurance, your coverage ends when your policy does. You’ll need to reapply for a term policy if you decide you want more coverage, and that usually comes with increased rates.
Whole life insurance is different; you’re locking in a rate that’s guaranteed to provide coverage for you and your family as long as you pay your premiums on time.
Another interesting aspect of whole life insurance: it doubles as a growing cash-value investment. Whole life insurance plans build cash, especially over long periods of time. That’s part of why premiums are more expensive than other life insurance policies.
A portion of your monthly premium payment is set aside in a savings plan, the “cash value.” That cash value increases with interest and can be available for you to use as a loan if you have a financial emergency at any point in your life.
There is also frequently growth potential for a death benefit, the amount your family receives when you pass away that’s usually tax-free, within a whole life policy.
Once you reach a certain age, perhaps in your 60s and 70s, you may wonder if getting any type of life insurance is still worth it. The short answer, especially when it comes to whole life insurance, is yes.
While whole life insurance policies vary in their details in Canada, generally policies can regularly be obtained by those in their 60s, 70s, and even at age 80. Many come without the requirement of a medical exam or medical questions when you apply.
With whole life insurance policies, more important than age is your unique life situation when you apply. Your financial prosperity or management evolves drastically as you age; what you need in your 20s can be vastly different than what you need in your 60s.
That’s why many companies in Canada offer whole life insurance with a range of age limits, commonly between 60 and 85.
Since whole life insurance tends to be more expensive than other policies, it may suit the needs of seniors who are secure enough in their finances to afford it. That’s just the beginning though.
Since whole life insurance basically can double as a savings nest egg, Those who are older, or are either nearly retired or have been retired for a while, can take advantage of a whole life insurance plan as part of their inheritance estate planning for their family or other beneficiaries.
It also provides another avenue for tax-deferred investing, if that’s high on your wish list.
Additionally, as you age or after you retire, you begin to face new financial challenges, including possibly paying for more health care or college for a loved one.
Not only can you borrow against your investment savings tied to your whole life policy when it’s still active, but you also have the option of cashing it out if you need.
There are even several Canadian whole life insurance providers who tailor their whole life policy options to those between certain ages, for example, 40-75. In the end, your very specific needs and individual financial goals and planning should dictate the type of insurance you apply for.
If you’re interested in another reliable source of guaranteed money or have certain assets that need specialized protection, whole life insurance may be the best route even in your 70s and beyond.
Whole life insurance doesn’t just benefit those 60+ in Canada. Generally, insurance policy monthly premiums are less expensive the younger you are. For those in their 20s who have very specific long-term financial goals, whole life insurance works, too.
Those in their 30s in Canada suddenly face other financial situations, such as having children or paying a mortgage. They may also find that the life insurance plan at work is helpful, but needs to be supplemented. Whole life insurance can be that supplement.
Starting with whole life insurance in your 20s and 30s also means that your premium cost will not increase even for the next 50 years and fees associated with paying premiums or borrowing a loan from your savings amounts also may decrease over time.
Middle age is also a turning point. Starting at age 40, you’re planning even more for the future, including retirement and estate planning. You’ll likely be searching for the best elements to include in a plan to both protect your family and stabilize your finances.
Since whole life insurance policies sometimes generate dividends, that can go a long way to stabilize your financial life. And with the whole life policy, you know your family is ensured a death benefit that is tax-free.
If you feel whole life insurance may be right for you, the next step is talking with a knowledgeable financial planner who can provide an overview of the policy’s benefit and help you integrate a policy into your overall financial plan.
That’s when Sim Gakhar comes in. Gakhar is a financial adviser and life insurance agent who has more than a decade of experience helping Canadians find the right whole life insurance plan for them.
You can get started today simply by giving her a call at 647-889-7290 or sending her an email at [email protected]. It’ll be your most important first step to a successful financial future.
When it comes to life insurance there really is no time that is too soon to get covered. And, this is because the younger you are, the cheaper those premiums are going to be. Not only this, but you are probably healthy right now.
If you wait until something bad happens, you will not only without a doubt face higher premiums, but you might not even be able to get covered at all.
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