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FAQs: Life insurance in BC

How much does life insurance cost in BC?

Life insurance can cost anywhere between $15-$100 in BC. This is the average range for term life insurance premiums in Canada.

But make note that the older you are and the higher risk you are (e.g. pre-existing conditions), the more your premiums will cost. So there’s no time like the present to get a life insurance policy, so you can lock in lower rates.

How do I apply for life insurance in BC?

You can apply for life insurance in BC by following these recommended steps:

Determine your insurance needs (how much insurance do you need and for how long? Do you need other types of insurance, such as disability insurance or medical insurance plans?).
Prove to insurance companies that you’re in good health. This could be in the form of a simple questionnaire or, in some cases, a medical exam.
Answer all questions honestly because if you don’t, then that could make your contract voidable and leave your family without coverage.
Shop around with insurers to get life insurance quotes and find the best deal – make sure you are looking at comparable policies in terms of the coverage amount, term length and other terms (like riders, for example).
Read the policies carefully to understand what they do and don’t cover before you sign one.

At what age should you buy life insurance in British Columbia?

You should buy life insurance at the age you need it or expect to need it. For example, if your family status has changed (maybe you’re about to have a child), you’ll want to get life insurance now. This will ensure your family income is secure in the event of your passing.

The younger you are, the lower your monthly premiums are likely to be. And you may not need to get a medical examination. But as you get older, you’re more likely to develop a medical condition, which will increase your life insurance premiums.

Is it legal to sell my life insurance in BC?

In British Columbia, it is illegal to sell your life insurance to a third party. This legislation is in place to prevent people from exploiting those in financial need or who are not well informed about their policy.

If you can no longer afford your life insurance premiums, you still have other options. For example, you can negotiate a deferral of payment or cancel the policy if the terms allow. Look into financial planning services or talk to one of our advisors to learn more about your options.

Is life insurance taxable in BC?

In British Columbia and the rest of Canada, payment of insurance money (death benefits) is not taxable, regardless of your policy size.

In specific situations, a death benefit is taxable. Here are some examples:

When you don’t name a beneficiary,
When you have a permanent life insurance policy with a cash value,
When your permanent policy is used as loan collateral,
When you sell your permanent policy while you’re still alive.

Can you trace a life insurance policy in British Columbia?

You can trace a life insurance policy in British Columbia by submitting a request with the OmbudService for Life and Health Insurance (OLHI).

Here’s how it works:

If you can’t find the policy yourself, you need evidence the policy existed.
The person must have passed away three months to two years ago.
You can submit a request with OLHI and if approved, they will ask their member companies to search their policies.
99% of Canadian life insurance companies are OLHI members but if your lost policy is with a non-member company, OLHI can’t find it.
If the policy is part of a group policy or contributory life insurance (e.g. employee life insurance), and OLHI can’t find it, contact the covered person’s former employer.

How does life insurance work in BC?

In British Columbia, life insurance works by creating an agreement between you (the policyholder) and an insurer. In exchange for you paying monthly premiums, the insurer will give your death benefit insurance money to your beneficiaries.

Other quick tips about how life insurance works:

A simple rule of thumb with how much insurance coverage to get: 10 times annual income of the policyholder (this won’t apply to everyone, but it’s a good starting point).
Make your life insurance money payable to your dependents by naming them as beneficiaries in your contract.
If you pass away, your beneficiaries will need to file a claim within the benefit period in order to receive the death benefit. This benefit period tells you how long you have to make a claim.
Your beneficiaries can use the death benefit for anything they need. There are no “eligible expenses” that restrict how they can use the death benefit.
You can get optional life insurance benefits through your employer if they offer it. But this coverage ends if you leave your job. Optional life insurance plans aren’t a replacement for a personal life insurance plan.

What does life insurance cover in British Columbia?

In British Columbia, an individual life insurance plan covers the death of the policyholder, such as death by illness or accidental death. The specifics will be outlined in your policy, including possible exceptions.

Your beneficiaries will receive a tax-free lump sum payout that they can use for anything they wish – from mortgage payments, to tuition, childcare and beyond.

With PolicyMe, you can get life insurance coverage to age 85, as long as you sign up for your term insurance policy by age 75.

Can I get life insurance without a medical exam in British Columbia?

Yes, there are two ways you can get life insurance without a medical exam in British Columbia:

You’re relatively young and healthy (as deemed by the insurer) and may not need a physical exam for a term policy.
You can apply for no medical life insurance. This option is often more expensive and gives you less coverage. But no medical life insurance isn’t for the average Canadian.

Before you opt for no medical/simplified life insurance, you should still apply for a term life insurance policy and see if you get approved first.

The first step to your application is a questionnaire about your health. This is for the insurer to know your current medical condition and if you have pre-existing conditions. So you might not even have to do a medical examination. This way, you can still enjoy the lower rates and higher coverage that term insurance offers.

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FAQs: Life insurance in BC