Life Insurance

A good rule of thumb is to have coverage worth 10 to 12 times your annual income, but your actual needs depend on your specific situation. Consider your outstanding debts like your mortgage, your family's daily living expenses, future costs like your children's education, and any income your family would lose if you passed away. At Ellis & Ellis, we conduct a comprehensive needs assessment to help you determine the right coverage amount for your unique circumstances, ensuring your family is fully protected without paying for more insurance than necessary.

Term life insurance covers you for a specific period (like 10, 20, or 30 years) and is more affordable, making it ideal for temporary needs like covering a mortgage or supporting young children. Whole life insurance provides lifelong coverage with premiums that never increase and builds cash value over time that you can borrow against. Think of term as renting and whole life as buying. Many people choose term life for its affordability during their peak financial responsibility years, while others prefer whole life for permanent protection and the investment component.

Yes, many people with pre-existing conditions can still qualify for life insurance, though your premiums may be higher depending on the condition and severity. Conditions like high blood pressure, diabetes, or a history of cancer don't automatically disqualify you. Every insurance company has different underwriting guidelines, which is where working with a broker like Ellis & Ellis becomes valuable. We work with multiple insurance providers and can shop your application to find the company most likely to offer you the best rates based on your specific health situation.

The best time to buy life insurance is now, while you're young and healthy. Premiums are based largely on your age and health status, so the younger and healthier you are when you apply, the lower your rates will be. Those lower rates are then locked in for the duration of your policy. Major life events like getting married, buying a home, having children, or starting a business are all important triggers to purchase or increase your coverage. Even if you think you don't need much coverage now, locking in a low rate early can save you thousands over the life of your policy.

Generally, life insurance premiums for personal policies are not tax-deductible in Canada. However, the death benefit your beneficiaries receive is typically tax-free, which means your family gets the full amount without owing income tax on it. This makes life insurance one of the most tax-efficient ways to pass wealth to your loved ones. If your policy builds cash value, the growth is also tax-deferred, meaning you won't pay taxes on it until you withdraw the funds. We recommend consulting with a tax professional about your specific situation, but the tax advantages of life insurance are one of its most valuable features.

If you miss a premium payment, most insurance companies provide a grace period of 30 days to make the payment without losing coverage. If you don't pay within that period, your policy will typically lapse and your coverage will end. For term life insurance, this means you lose your protection entirely. For whole life or universal life policies with cash value, you may have options like using your accumulated cash value to keep the policy active temporarily. If your policy does lapse, you may be able to reinstate it within a certain timeframe, but you'll need to prove you're still insurable. At Ellis & Ellis, we help you choose payment schedules that fit your budget to avoid lapses.

Your beneficiary is the person or people who will receive your life insurance payout when you pass away. Most people name their spouse, children, or other family members, but you can also name a trust, charity, or business partner. You can designate multiple beneficiaries and specify what percentage each receives. It's important to keep your beneficiary designations up to date, especially after major life events like marriage, divorce, or the birth of a child. You should also consider naming contingent beneficiaries in case your primary beneficiary passes away before you. At Ellis & Ellis, we'll guide you through the beneficiary selection process and ensure your wishes are clearly documented.