|Insurance Buying Tips #1: Shop smart|
|When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.|
|Insurance Buying Tips #2: Look for discounts|
|Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.|
|Insurance Buying Tips #3: Fill in the gaps|
|An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.|
When it comes to life insurance products most forget or are recommended against the other option at hand, permanent life insurance plans. Reason for this state of affairs dates back to the time when permanent insurance was over sold by salespeople motivated by higher commissions, leaving many paying for something that didn't really translate into benefits.
Before you discard options in favor of any one life insurance policy in Ontario and Ottawa, you need to understand your circumstances and your expectations from your life insurance plan. There are situations when you would be better off opting for permanent insurance.
1. Leaving behind an estate that faces high taxes:
On your demise any property you own won't get passedon to your children tax-free; it will be on the hook for enormous capital gains taxes, regardless of whether it gets sold by the heirs. A permanent life policy with a death benefit aimed at offsetting all or part of thetax expenses will possibly be the best way to retaincapital in the family.
2. Having more money than needed and paying tax on it:
|Insurance Buying Tips #4: Purchase life insurance—you aren’t too young|
|Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.|
|Insurance Buying Tips #5: Talk to an independent agent|
|An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.|
|Insurance Buying Tips #6: Only buy insurance to maintain your existing standard of living|
|You don’t need insurance for events that won’t severely strain your finances. Start with your basic needs (home, auto, business), then work your way to include other needs (cyber, liability). You can always obtain coverage later for something if you change your mind. You can minimize your risk and maximize your savings by buying insurance that won’t cause you to break the bank.|
Permanent insurance policy acts as a viable tax shelter, but only when TFSAs and RRSPs are maxed out, a significant amount is invested in bonds or other investments, and there's certainty that money won't be needed in this lifetime.
3. Wanting to leave behind a financial legacy:
Say you have a disabled dependent or someone who is not in a position to earn for themselves and you want to leave behind a hefty financial payout for him/her; rather than trying to save for yourself get a permanent insurance policy for greater returns.
4. Possibility of becoming uninsurable:
If there's the slightest chance that you and/or your child may not qualify for insurance in the future, most likely due to a medical diagnosis that significantly impacts life expectancy, apermanent life policy is an excellent choice.
Permanent life insurance plans come in two types – Universal and Whole.Both involve a combination of life insurance and an investment component. Difference comes in the power you have in choosing where the investment component goes – in a Universal Life policyyou have complete power while in a Whole Life policy your insurer decides where the investment goes. Making a choice between Whole life insurance and Universal life insurance in Ottawa and Ontariocomes down to knowing your own investment acumen and deciding if you are better off leaving it to the experts.
|Insurance Buying Tips #7: Ask your insurance provider what the policy doesn’t cover|
|Every insurance policy has perils that are not covered by your policy. These perils are referred to as “exclusions”, and every policy has them. Ask your insurance provider to explain the exclusions in your policy to avoid discovering what they are once you incur damages or a loss.|
|Insurance Buying Tips #8: Consider bundling several policies with one insurance carrier|
|here may be value in bundling several policies with one insurance carrier. If you’re looking to insure multiple vehicles or obtain multiple types of business coverage (e.g., liability, property, cyber), then you may want to consider obtaining coverages under one insurance provider who carries multiple products, and who may be able to offer you multi-policy discounts or loyalty programs.|
|Insurance Buying Tips #9: Review your insurance needs on a yearly basis|
|As your needs evolve, so will your insurance policy. Maybe you’ve acquired a new vehicle since obtaining auto insurance for your primary vehicle, or started operating your business out of your home, or experienced a cyber-attack during the year… Whatever the change(s), you’ll want to make sure you’re covered for any new risk exposures. Talk to your insurance provider to stay on top of your insurance needs.|