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Life and mortgage insurance: frequently asked questions

Term or permanent, how much coverage to buy, medical exams, beneficiaries, and lender mortgage insurance compared with an individual policy.

Choosing between term and permanent, setting the amount, and naming beneficiaries are the three decisions with the most impact, and also the least understood.

These questions also cover mortgage insurance: how the coverage offered by your lender differs from an individual policy that belongs to you.

What is life insurance for?
Life insurance helps protect your loved ones financially in the event of your death. The amount paid can replace your income, pay off the mortgage and debts, cover final expenses or fund your family’s future needs.
How much life insurance do I need?
The right amount depends on your income, your debts, your mortgage, the number of dependent children and the goals you want to protect. Our personalized analysis estimates the coverage suited to your situation.
What is the difference between term and permanent life insurance?
Term life insurance provides coverage for a set period, for example 10, 20 or 25 years. Permanent life insurance covers you for life and can be used to cover final expenses, leave an inheritance or pay certain taxes owing at death.
How much does life insurance cost?
The price depends on your age, your health, your smoking status, the insured amount and the type of coverage chosen. In general, buying while you are young and in good health gets you a better rate.
Do I need a medical exam?
Not always. Depending on your age, your health, the amount requested and the insurer, a medical questionnaire may be enough. Simplified issue or no-medical-exam coverage is also available in some situations.
Can I get life insurance if I have a health condition?
Yes, in many cases. A health condition does not automatically mean your application will be declined. Depending on your situation, the insurer may offer coverage at the standard rate, with an extra premium or subject to certain conditions.
Is the life insurance payout taxable?
In general, beneficiaries receive the life insurance amount without paying tax on it.
Is my group life insurance at work enough?
It can be a good base of protection, but the amount is often limited and tied to your job. Personal life insurance can supplement that coverage and keep protecting you if you change employer or retire.
What is the difference between personal life insurance and mortgage insurance?

Mortgage insurance offered by a lender mainly serves to pay off the loan balance, and the financial institution is usually the beneficiary.

With personal life insurance, you own your contract, you choose your beneficiaries and the coverage does not depend on your lender.

When should I review my life insurance?
It is recommended to review your coverage after a major change, such as buying a property, a birth, a marriage, a separation, an increase in income or starting a business.
Why refuse the insurance offered by the bank?
The bank is usually the sole beneficiary, the coverage amount shrinks over the years as you pay down the loan, and the premiums are not tailored in depth to your individual health profile.
Can I switch insurance if I already signed with my bank?
Absolutely. It is entirely possible, and often recommended, to cancel your lender’s coverage once you have secured an individual policy at a much better price.
Why does an entrepreneur need life insurance?

Four situations come up again and again: a business loan or line of credit you personally guaranteed, a shareholder agreement that calls for buying out a partner’s shares on death, a key person whose loss would hurt revenue, and a family that lives on what the business pays you.

The tax-free amount paid to your beneficiaries can clear the debt, fund the buyout, or simply buy your family time. We compare term and permanent coverage from several insurers and work out the right amount for your situation.

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