Life Insurance Options - Small businessess from 1 to 80 employees outsource your payroll management to us and let us worry about your payroll processing.
RSS Follow Become a Fan

Delivered by FeedBurner

Recent Posts

Tax changes to expect when you’re expecting
2016 Tax Tips for 2015 Filing Year
From Proprietorship to Corporation - When is the Best Time to Incorporate?
Tax Specialists Brief your Clients About CRA Fraud And E-Mail Scams
Bank of Canada cuts rates again

Most Popular Posts

Help your teenager build credit responsibly
Being an Executor of an Estate
Student Line of Credit
Principal Residence Exemption


aliko nutrition store- isotonix
aliko payroll services
canada revenue news and videos
canadian news
Cross border Tax
Disability awareness and Benefits for disabled
estate planning
Home Car Insurance
Income Splitting Strategies in Retirement
kids and money -set your children up for financial success
life insurance
on line safety tips
online safety tips
Real Estate - Investments / Retirement
Retirement planning
Save your money
small business planning
Tax Information for Students
tax news
tax planning
Tech news


January 2016
July 2015
May 2015
April 2015
February 2015
December 2014
November 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013

powered by


Life Insurance Options

Life Insurance Options
Life Insurance Options
Written by Guest Post
When you purchase your life insurance there are a variety of options available to you. These life insurance options are known as ‘riders’ and serve a wide variety of purposes.  Like buying a new car, adding these bells and whistles can add substantially to your costs without necessarily giving you a better ride.  Let’s review the various riders, and decide if they’re worth the extra money or not.
Accidental Death rider (AD)
This rider allows you to purchase an additional amount of coverage that will pay out subject to accidental death.  By contrast, it will not provide additional benefits should you die due to medical reasons.  Accidental death provides coverage at a very low cost. But here’s the question we need to answer – do you need more coverage if you die as the result of an accident instead of due to medical reasons?  I can’t imagine a case where how we die impacts how much coverage we should purchase.  If you need more life insurance, purchase it as a regular policy. If you don’t need more coverage, then save your money.  In either case, accidental death rider is an option you should pass on.
Disability waiver of premium (WP)
This is an interesting and unique rider.  If you purchase this rider and become disabled for longer than 6 months, the rider will kick in and pay your life insurance premiums for the balance of your disability.  Certainly covering your bills upon disability is a great idea – as Forrest Gump said, that’s one less thing to worry about.  But let’s pause for a second and consider what happens if you become disabled.  Your insurance premiums are now paid, but who’s paying the mortgage?  And the groceries?  And your heating bills?  The answer is nobody, unless you have proper disability protection.  A proper disability plan should cover a substantial portion of your full income and not just your life insurance premiums.  Effectively you want a new paycheque should you become disabled.  That replacement paycheque should be enough to cover all your bills, including your life insurance premiums.  In other words, if you have proper disability protection then you don’t need a disability waiver of premium rider on your life insurance policy.  So make sure you have proper disability coverage (that’s extremely important!) and then take a pass on this rider.
Children’s Protection rider (CPR)
This rider covers all of your children until they are adults. Typically the premiums are small, in the range of $5/month for $10,000 of coverage.   As the coverage lasts until they are adults and then is assumed to lapse, this is basically term insurance for your children.  While deciding if you should cover young children with life insurance is beyond the scope of this article, if you do decide to purchase insurance on your children until they’re adults, this is an extremely low cost way of accomplishing that goal.  In short, if you want insurance on your children while they’re at home,consider a Children’s Protection rider.
Guaranteed Insurability Option (GIO)
This rider guarantees that you have the option of purchasing additional insurance in the future, without a medical exam.  Should you take advantage of the option, you will have to pay the additional insurance premiums – the cost of the rider doesn’t cover future insurance costs, only the option to purchase more insurance.  This is an option rarely used by individuals and is much more commonly used by businesses that are growing.  It provides the ability for a business to manage risk by guaranteeing future insurance purchases.  You can generally ignore this option if you are purchasing life insurance for personal reasons.  Consider the option if you are purchasing life insurance for business reasons, to guarantee that you can purchase insurance in future years, but compare it to the cost of just purchasing the full amount of the additional insurance today.
Second insured rider
If you have a base policy, it can be noticeably less expensive ($60-$70/year) to add a second person to your life insurance policy.  This is because life insurance premiums consist of a monthly administration fee and an insurance cost.  When adding a second person as a rider, the monthly administration fee is either discounted or waived, leaving just the basic insurance costs.  This is a particularly effective way to add insurance for younger female nonsmokers, as their actual underlying cost of insurance is negligible.
Term riders
Rather than taking out additional coverage as a separate policy, a term life insurance rider allows you to top up your coverage for a period of time.  Just like a second insured rider, adding additional term rider coverage on your life can save you the monthly administration fee when compared to a seperate policy thus providing some savings.  Consider doing this if you need additional term coverage for a period of time.
Which life insurance options make sense for you?
That covers most of the common rider options available on Canadian life insurance policies today.  When purchasing a life insurance policy I recommend ensuring you have proper basic coverage first and foremost, and then examine the additional riders and options individually and separately.

0 Comments to Life Insurance Options :

Comments RSS

Add a Comment

Your Name:
Email Address: (Required)
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment