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TERM LIFE INSURANCE
Term life insurance offers protection for a predetermined time frame, or term. Its purpose is to shield your beneficiaries financially in the event that you pass away within the policy's term.
Coverage Period:
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Term Length: Depending on the insurer and the insurance selected, terms might vary from five to forty years.
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·Renewability: Although premiums may go up, certain term life policies allow you to continue the policy after the term ends without having to get a medical checkup.
Death Benefit:
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Lump Sum payout: The beneficiaries get a tax-free lump sum payout if the insured dies within the policy's term. Living expenditures, mortgage payments, debt repayment, educational fees, and other financial demands can all be met with this benefit.
UNIVERSAL LIFE INSURANCE
Universal life insurance is a kind of permanent life insurance that includes both investment option and a death payout.
Lifetime Coverage:
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Term life insurance covers a specific term (e.g., 10, 20 years), whereas universal life insurance offers coverage for the insured's whole lifetime.
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The policy stays in effect as long as premiums are paid until the insured's death, giving beneficiaries a death benefit.
Death Benefit:
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Similar to other life insurance policies, universal life insurance pays beneficiaries a death payment in the event of the insured's passing. According to Canadian tax legislation, beneficiaries of the death benefit are often exempt from income tax.
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Depending on their needs, policyholders can select from a variety of death benefit alternatives, such as level or escalating death benefit.
Cash Value Accumulation:
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Over time, universal life insurance contracts accrue cash value that grows tax-deferred and earns interest or investment returns.
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The cash value of the insurance can be used by the policyholder to pay premiums, borrow against the policy, take withdrawals, or save money for future needs.
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Growth of cash value is influenced by a number of variables, including insurance costs, the interest rate credited to the cash value account, and the insurer's investment performance.
Investment Options:
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Certain universal life insurance plans have cash value account investment choices that let policyholders distribute money to various investment vehicles such index funds, equity funds, and fixed-income investments.
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Depending on how well their selected assets perform, policyholders take on investment risk and possible rewards.
Policy Flexibility:
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In order to accommodate shifting financial demands and objectives, universal life insurance policies offer flexibility in modifying coverage quantities, premium payments, and death benefit alternatives.
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Subject to the terms and circumstances of the policy, policyholders can modify their policies to maximize coverage and cash value accumulation over time.
WHOLE LIFE INSURANCE
As long as payments are paid, whole life insurance is a sort of permanent life insurance that covers the insured for the duration of their life.
Lifetime Coverage:
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Term life insurance covers a particular term (e.g., 10, 20 years), but whole life insurance offers coverage for the insured's whole lifetime.
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The policy guarantees beneficiaries a death benefit and remains in effect until the insured passes away as long as premiums are paid.
Cash Value Accumulation:
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A cash value component of whole life insurance plans increases over time in a way that is tax-deferred.
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Every premium payment contributes to the growth of cash value, which, depending on the design of the policy, may yield dividends or interest.
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Through policy loans or withdrawals, policyholders can access this cash worth for a variety of uses, such as augmenting retirement income or paying for unforeseen bills.
Guarantees and Flexibility:
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Guarantees like guaranteed cash value growth and guaranteed death benefit are frequently included in whole life insurance contracts.
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Certain plans provide policyholders with choices for cash value management and flexible premium payments, enabling them to modify coverage or access assets in response to their financial circumstances.
Death Benefit:
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Upon the insured's passing, beneficiaries receive the death benefit of whole life insurance, which offers financial security to pay for bills, burial expenses, estate taxes, and replacement income for dependents.
Under Canadian tax legislation, recipients are often exempt from paying taxes on the death benefit.
Company owners can choose from a variety of insurance packages that are intended to shield their establishments against different risks and obligations.
Insurance for Key Personnel:
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Goal: Offers financial security to the company in case a vital employee or owner passes away or becomes incapacitated.
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Coverage: Provides a benefit to the company to offset costs related to hiring new employees, revenue losses, or reorganizing operations following the departure of a critical employee.
INSURANCE FOR BUSINESS OWNERS
CRITICAL ILLNESS INSURANCE
Critical illness insurance is a kind of policy that pays out a lump amount to the policyholder in the event that they are diagnosed with a covered critical illness within the policy's term.
Coverage:
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26 Covered Illnesses: Major organ failure (e.g., kidney, lung), cancer, heart attack, stroke, and other specific significant medical disorders are examples of critical illnesses that are typically covered.
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Diagnosis Requirement: Benefits are disbursed upon the diagnosis of a qualifying sickness, usually following a waiting time of, say, thirty days.
Lump-Sum Payment:
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The goal of critical illness insurance is to give the insured a tax-free lump sum payout in the event that a covered condition is diagnosed.
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utilize of Funds: The insured may decide how to utilize the money, for example, to pay for uninsured medical costs, replace income lost while recovering, change living arrangements, or settle debts.
Policy Features:
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Policyholders can choose to renew coverage at the conclusion of the term without presenting proof of insurability if their policy is guaranteed or renewable.
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Survival Period: In order to be eligible for benefit payments, the insured usually needs to live for a predetermined amount of time after diagnosis (the "survival period"). This depends on the type of illness and every provider has their own associated policy.
Disability insurance is intended to replace lost income in the event that a person becomes ill or injured and is unable to work.
Types of Disability Insurance:
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Short-Term Disability Insurance: After a waiting period (e.g., 1–14 days), it replaces income for a set amount of time, usually up to 6 months to 2 years.
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If the insured's disability keeps them from returning to work, long-term disability insurance (LTD) provides income replacement for a longer duration, possibly up to retirement age.
Coverage and Benefits:
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Income Replacement: Up to a maximum monthly benefit amount, disability insurance replaces a portion of the insured's pre-disability income, often ranging from 50% to 70%.
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Tax Treatment: Unless the premiums (e.g., individually purchased plans) were paid with after-tax monies, benefits are normally taxed as income when received.
DISABILITY INSURANCE
ACCIDENT INSURANCE
Accident insurance is a type of insurance that offers financial protection in the event of an accident resulting in injury or death. This insurance can be part of a broader health insurance plan or a standalone policy.
Types of Accident Insurance:
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Personal Accident Insurance: if the insured is injured in an accident, this can cover compensation for accidental death, disability, or medical expenses.
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Accident Health Insurance: it offers medical expenses resulting from an accident, such as hospital stays, treatments, and rehabilitation.
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Travel Accident Insurance: if the insured is involved in an accident while traveling, both domestically and internationally.
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Income Replacement: Up to a maximum monthly benefit amount, disability insurance replaces a portion of the insured's pre-disability income, often ranging from 50% to 70%.
Tax Treatment: Unless the premiums (e.g., individually purchased plans) were paid with after-tax monies, benefits are normally taxed as income when received.
Purpose:
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The costs of care in environments like nursing homes, assisted living facilities, or in-home care services are partially covered by long-term care insurance.
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It offers financial assistance to guarantee that people obtain the care they require without exhausting their finances or placing a strain on family members.
Coverage and Benefits:
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Types of Care Covered: Policies differ, but generally speaking, coverage covers services like help with clothing, eating, using the restroom, bathing, managing medications, and watching over someone who has cognitive impairment.
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Daily Benefit Amount: Up to a certain maximum benefit duration (such as two years, five years, or lifetime), policies offer a daily or monthly benefit amount to cover long-term care costs.
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Certain policies provide inflation protection, which allows benefits to be adjusted over time to keep up with growing healthcare expenses.
LONG-TERM CARE INSURANCE
GROUP INSURANCE BENEFIT PLANS
Group insurance benefit plans are employer-sponsored insurance policies that offer coverage as part of an employee benefits package to a group of workers (and frequently their families).
Types of Coverage:
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Health and Dental Insurance: Provides coverage for employees' and their families' dental needs as well as medical costs (such as prescription medications and paramedical services).
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Life insurance: In the event of the employee's passing, beneficiaries receive a lump sum payment.
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Disability insurance provides income replacement in the event that a worker is incapacitated and unable to work.
HEALTH AND DENTAL INSURANCE
As it offers coverage for medical costs and dental care that provincial health insurance plans might not cover in full, health and dental insurance is a crucial part of personal financial planning.
Health Insurance:
Coverage:
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Medical Expenses: A variety of medical costs are covered by health insurance, such as hospital stays, x-rays, blood tests, and surgical procedures in addition to doctor and specialist visits.
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Paramedical therapies: Up to certain restrictions, coverage may apply to therapies like physiotherapy, chiropractic adjustments, massage therapy, and acupuncture.
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Prescription Drugs: Prescription drug prices are usually partially covered by plans, with some demanding copayments or coinsurance.
Dental Insurance:
Coverage:
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Basic Services: Preventive care (checkups, cleanings, etc.), basic procedures (fillings, extractions, etc.), and emergency dental care are usually included.
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Major Services: Certain plans include coverage for more involved operations including root canals, crowns, bridges, and orthodontics (braces, for example).
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Annual Maximums: Depending on the kind of service, plans frequently have annual maximums on coverage amounts.
​​Travel insurance is intended to shield travelers' finances and offer support in the event of unanticipated circumstances when they are away from their home province or nation.
Types of Travel Insurance Coverage:
Emergency Medical Coverage:
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Goal: Pays for costs associated with urgent emergency attention and required medical care while traveling. Hospitalization, emergency medical evacuation, ambulance services, doctor costs, and prescription drugs are all covered.
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Limits: Certain terms and coverage levels for pre-existing medical illnesses may be limited by policies.