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How much will a million-dollar life insurance policy cost you?

If you have decided that your family needs require a million-dollar life insurance policy but feel it is unaffordable, perhaps you need to rethink. According to the experts, this is not an unreasonable amount for a middle-class Canadian family to assure their minimum coverage needs.

However, there are several considerations that need to be taken because life insurance policies are based on certain factors, including your age and health. These are calculated according to the financial risk of death to the company that offers insurance.

Planning a life insurance policy

According to the Canadian Consumer Agency, when you plan your life insurance policy, you need to make sure that if something happens to you or your spouse, your family will be able to carry on living without any major disruptions.

Your life insurance should be ten times your annual salary. As a matter of fact, $1 million is the baseline for life insurance by the primary breadwinner if you do not want your family to struggle financially when you are gone.

Types of life insurance policies

There are two types of life insurance policies: term and permanent.

Term life insurance is more affordable, but also more basic in terms of structure. Term life insurance offers temporary coverage for 10, 15, 20, 25, 30, and 40 years, during which if the insured passes, the beneficiaries will receive the proceeds of the life insurance policy tax-free. The decision to choose which duration of life insurance depends on the liabilities and needs the insured is looking to cover.

For example, if the insured has a 30-year mortgage on his house, he will be advised to obtain life insurance coverage that will last for 30 years. It is important to discuss the details of your life insurance policy with your insurance advisor. Depending on your policy, you might be able to renew your life insurance when the term ends. This is an advantage because you will not be asked to go through medical underwriting for the renewal.

 

Permanent life insurance is coverage that lasts for the entire duration of the insured’s life span. There are three main types of permanent life insurance: Term 100, Whole Life, and Universal Life. The first option provides a tax-free death benefit to the beneficiary much like the term life insurance products, while the latter two enable the insured to have both death benefit and cash value within the policy.

The cash value grows on a tax-deferred basis and it can be invested in different options such as bonds and mutual funds. Tax is only paid when the money is withdrawn, and this deferment allows the cash to grow. These policies last indefinitely and are used for estate planning.

 

 

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Typical rates

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Generally, there are a couple of factors that affect the rate of life insurance.

  • Duration (the longer the duration of coverage the higher the premiums)
  • Age (as the proposed insured ages, the cost of life insurance increases)
  • Sex (female mortality rate is lower than male, hence lower premiums)
  • Smoking Status (if you are categorized as a smoker by the definition of the underwriting, your rate will be higher than nonsmoker)
  • Health Conditions (diagnosed health conditions and medications affect the rate of insurance)

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These prices are for male and female who is in good health and does not smoke. The prices do change if you are a smoker, have poor health, or take regular medications.

 

If you have a history of heart disease, or cancer, or work in one of the hazardous occupations, you will pay far higher premiums, and in some cases, the underwriting might reject your case.

 

Life insurance policies can make an excellent investment. Even though 1 million dollars might sound expensive, when premiums are paid over many years, they are affordable. The money from life insurance will provide an infusion of tax-free money for your spouse and family when you are gone and will pay for their expenses.

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Finding the right Life insurance policy with the proper coverage amount at the right price is complicated and overwhelming. Our expert advisers are fully qualified to help you work out the coverage that will meet the needs of your family.

By taking your age, and health, liabilities, and goals into consideration. At Apluswealth, you can get a quote, compare quotes, and find the life insurance quote you feel comfortable with. Our life insurance advisors will provide you with quotations and the most suitable policy types.

Contact our expert advisers today and find out which is the best life insurance for you.

Email: Contact@apluswealth.com

Tel: 1-888-461-6120

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