Ten things you should know about life… insurance

1.    Virtually everyone should have life insurance

Only a few people don’t need life insurance; most people need it because they do not have the funds readily available to cover all debts and funeral expenses, they want to offset the loss of their income to their spouse and/or children, or simply because they want to leave additional money to extended family or a charity.

2.    Get the most life insurance coverage at the lowest cost

Of the many life insurance products out there, Term life insurance typically is known to offer you the most coverage for the least amount of money; and although there is no investment or saving component, there are many who would tell you to "Buy term, and invest the difference."

3.    Avoid guaranteed issue policies, if you are healthy

Guaranteed issue life insurance policies typically offer smaller insurance amounts and can be purchased without a medical exam. A guaranteed issue policy is available to everyone, healthy or not, but the ease of purchase is reflected in higher premiums as compared to Term life insurance for the same coverage amount. Of course, a guaranteed issue policy is still worth having over no life insurance coverage at all.

4.    Buy only what you need

It's not a good idea to buy too little insurance, but buying too much is unnecessary and will only cause your insurance premiums to be higher. So before you buy, review your needs and what it is you want your coverage to achieve and go from there.

You'll find that many industry insiders suggest that the amount of life insurance coverage you should buy should be five to ten times your annual, pre-tax, income.

5.    Save money with one policy that covers two people

If you're looking to get life insurance for yourself and your spouse or partner, then consider buying one joint policy, instead of two individual policies. The premium is usually about 15 per cent less for a joint life policy than 2 single life insurance policies of the same coverage amount.

6.    Avoid monthly payment plans if you can

Save money by paying your annual premium all at once, instead of setting up a monthly payment plan. Almost all life insurance companies will charge you a little extra to cover the cost of administering your payments every month.

7.    The ‘when’ of life insurance

People often look to buy life insurance when they are planning on getting married, starting a family, buying a home, changing jobs, facing unemployment, starting up a business, or retiring. It is during these life event milestones when your life insurance needs are most likely to come to the forefront.

For the last two years in a row, more people shopped online for life insurance on www.kanetix.ca in January, February and March than any other month in the year.

8.    Average life insurance policy amounts

According to 2007 industry statistics, more than 20 million Canadians own life insurance and the average policy amount owned was $156,200 for individuals and $312,200 for households.

9.    Workplace life insurance is often not enough

Your workplace life insurance coverage may not protect you and your loved ones as much as you think. Review how much your employer-paid life insurance provides and calculate whether this is enough to keep your family comfortable in the absence of your income.

10.    Premiums vary wildly across life insurers

Compare the life insurance policies and prices of competing insurers because every company prices their policies differently. A real easy way to do this, without having to listen to a sales pitch is to compare premiums and policies online. It's a great way to compare prices and see what different companies have to offer.

Compare life insurance quotes online today.