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Different Types of Life Insurance in Canada

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Introduction

If you’re looking to buy life insurance, there are a number of different options. Each type of policy has its own set of benefits and drawbacks. The following table will help you understand the differences between these types:

Term Life Insurance

How term life insurance works, is a type of life insurance that provides coverage for a specific period of time. It’s the most affordable option, but it might not be right for you if you’re looking for long-term protection or if you have multiple family members who need to be covered by life insurance.

Term policies have an expiration date, so they’ll stop paying out benefits after that date. If your beneficiary dies before their term expires, then they won’t receive any money from the policy while they are alive. However, some companies will keep paying out benefits even after their end date because there are other ways in which they can collect money from it: such as through investment returns or dividends paid out on stocks owned by the policyholder or their beneficiaries (if applicable).

Permanent Life Insurance

Permanent insurance is a type of life insurance that is designed to last for the rest of your life. It’s also called level premium life insurance, and it’s usually more expensive than term insurance.

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Permanent plans can be paid for with a single premium, whereas term plans require you to pay monthly premiums over time (for example, $50 per month).

Return of Premium Term Life Insurance

Return of Premium Term Insurance is a type of term life insurance that pays you back the money you’ve paid in premiums if you cancel before the end of your term. You can cancel at any time, but if you do so before the end of your policy’s term (usually five or 10 years), then all future payments will be refunded to you. If someone dies while they have such an insurance plan and no one else is named as beneficiary, then their beneficiaries get all those funds instead of going towards future premiums.

Whole Life Insurance

If you’re looking for a type of permanent life insurance that offers coverage for your entire life, whole life insurance is the best choice.

Whole-life policies are designed to provide financial security and protection in retirement by paying off the policy whenever you die. They also help protect your heirs from unexpected expenses because they can be converted into cash at any time during the term of the policy—and not just at maturity.

They usually have a fixed premium that you pay every month or year until your death, depending on how long it takes for the funds inside them to mature and be paid out as death benefits (usually after 10 years). The premium doesn’t change during this period either; it stays fixed until maturity or withdrawal from one’s account occurs before then – whichever comes first!

Universal Life

If you’re looking for a type of life insurance that allows you to build up cash value, the Universal Life policy might be right for you.

The Universal Life policy is good for people who want to build up their own net worth and savings over time. This type of coverage works well because it can fund a retirement plan, pay off mortgages or other debts, or even help with a child’s education costs if they decide to go back to school after high school graduation. It can also be used as an investment vehicle by using it as collateral on loans or other investments that won’t generate income until after your death (unless there are penalties attached).

This information will help you decide which type of life insurance is right for you.

Life insurance is a contract between an individual and a company that provides financial protection in case of death. It can be used to help pay for funeral expenses, medical bills and other expenses related to the death of the insured person.

There are different types of life insurance: term (a fixed amount for a certain period), permanent (the risk does not end when the policy ends), universal (covers all deaths), single premium (a lump sum payment), and multi-premiums which allow you to choose how much coverage you want at any given time.

Term life policies generally have higher premiums than permanent ones but provide better returns over time due to their lower costs because they don’t need ongoing maintenance or renewal fees on top of premiums paid each year–they’re also ideal if you want something simple with less paperwork involved! For example: if someone wants $100K worth of coverage at age 25 then they’ll probably go with this option as opposed to buying five separate policies totalling $1M each; however, if they wanted ten years’ worth then there would be no point in purchasing anything else since everyone dies eventually anyway…

Conclusion

We hope this information helps you make the best choice for your life insurance needs. Remember that there are many options available in Canada and each one can be tailor-made to meet your unique needs so it’s important that you speak with an independent insurance agent about what would work best for you.

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How does increasing interest rates actually help curb inflation? – CBC.ca

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Once again, the Bank of Canada has raised its benchmark interest rate — this time to 4.25 per cent — reassuring us that its seemingly unending series of hikes are going to eventually help take the bite out of inflation. 

It has a ways to go. Inflation is currently 6.9 per cent and the central bank wants it back at two per cent. 

But for many Canadians, all they’ve seen is gas and food and just about everything else stay more expensive than ever, while mortgage rates soar.

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CBC News readers have asked: So how is increasing interest rates actually supposed to be helping? According to economists, making it tougher to afford things is part of the plan.

Why is the Bank of Canada increasing interest rates so much?

In 1991, the Bank of Canada and the Canadian government decided that low, stable and predictable inflation” would be the best thing for Canadians — and they agreed that a target inflation rate was two per cent

That’s around where it’s been in Canada for the past 25 years. 

But about a year ago, inflation started to rise — and rise, and rise — due to several factors, including supply chain issues that resulted from pandemic lockdowns, the war in Ukraine and climate change.


To get it down, Governor of the Bank of Canada Tiff Macklem says interest rates must go up. 

“It’s a bit counterintuitive for Canadians,” he told CBC’s Peter Armstrong last month. 

“Their rent’s going up, their groceries are more expensive, gasoline is more expensive. And now their borrowing costs are more expensive. So how does that work? Well, that does slow spending. That makes anything you buy on credit more expensive. So you you pull back and that helps get the economy balanced and that’ll relieve those price pressures.”

And that’s the whole point.

The Bank of Canada wants people to buy less stuff and slow the economy down. When the economy slows down, it says, prices will come down. 

At the same time, there is a tacit acknowledgement that it’s going to hurt. 

“Our economy will slow as the central bank continues to step in to tackle inflation,” said Finance Minister Chrystia Freeland in October. 

“There will be people whose mortgage payments will rise. Business will no longer be booming in the same way it has been since we left our homes after the COVID lockdowns and went back out into the world. Our unemployment rate will no longer be at its record low.”

WATCH | How far will the Bank of Canada go when it comes to rate hikes? 

Bank of Canada governor explains how far he’s willing to go to get inflation under control

26 days ago

Duration 8:52

In a wide-ranging interview, Bank of Canada governor Tiff Macklem says Canadians should expect more interest rate hikes, and a mild recession is possible, as the central bank continues its fight against inflation.

How does raising interest rates slow inflation?

Macklem says the economy is still “overheated” — with demand high and supply low. And the difference between the two drives prices up.

So in the central bank’s reasoning, if it can get demand down — get Canadians to want to buy less — that pressure on supply will ease. 

“We do need to slow the economy,” he said. “We don’t want to over-slow it. We don’t want to make this more difficult than it has to be.”

But at the same time, he said, if they do it in a half-hearted way, it will just prolong the pain.

Won’t it just make it harder to pay my mortgage or utilities and buy necessities like food and gas?

For now, yes. And Sheila Block, senior economist at the Canadian Centre for Policy Alternatives, points out that inflation has a really different impact depending on a person’s income level.

“The cost of food, rent, gas — all of those have paced above the overall [consumer price index] rate,” she told Power and Politics.

“And that is really going to have a tough impact on those lower-income people who spend a larger share of their income on those essentials. And also people who don’t have that kind of cushion to ride this out.”

WATCH | Should this be the last interest-rate hike?  

Could this be the final rate hike from the Bank of Canada?

18 hours ago

Duration 7:54

Sheila Block, senior economist at the Canadian Centre for Policy Alternatives, and Jean-François Perrault, chief economist at Scotiabank, joined Power & Politics Wednesday to discuss the Bank of Canada’s seventh rate hike of the year.

Is hiking interest rates the only way to get inflation down? 

Not according to economist Jim Stanford. The director of the Centre for Future Work told CBC News that a broader mix of policies is needed. 

“I think that our tool-kit itself needs a more diverse set of tools.”

Stanford says the government needs to introduce longer-term structural policies to address what he calls “the true causes of this inflation” which he says include “supply chains, energy price shocks, and the housing crisis in most parts of Canada.”

WATCH | Jim Stanford says there are better ways to tackle inflation:

Rate hikes have had ‘zero impact’ on inflation, says economist

17 hours ago

Duration 4:29

Jim Stanford, director of the Centre for Future Work says raising interest rates is not the only way to tackle inflation in Canada.

He says raising interest rates will do nothing to help global supply chains.

“In fact, they’ll probably make things a little bit worse because they discourage investment in new capacity and infrastructure by businesses,” he said on the CBC podcast Front Burner.

“What they will do, though, is basically throw a giant bucket of ice water over the entire economy. And we’re already seeing the signs are that we’ve seen a dramatic slowdown in employment growth. We’ve seen a dramatic slowdown in GDP growth. And this is just the beginning.

He says it would be more effective to try and cool off “the least productive sort of froth in the economy,” such as the housing market. He suggests making better use of rules on mortgage insurance and stress tests “to cool off the property bubble without having to hammer the whole economy with higher interest rates.”

I’m hearing this slowing of the economy could send Canada into recession. 

Some economists are indeed suggesting that Canada could be headed for a recession in 2023. 

“I think a recession is both likely globally and most probable in Canada,” said former Bank of Canada and Bank of England governor Mark Carney in October.

The good news is, he also thinks it won’t be deep or long, citing the country’s strong labour market and low unemployment as reasons why Canada will do better than other countries.

WATCH | Everything you want to know but about a recession but were afraid to ask: 


Macklem is optimistic, too. 

“This is the biggest test we’ve ever had. But monetary policy works. It takes time to work. And we do have to go through a difficult adjustment.”

But he insists Canada will come out of it. 

“Growth will pick up. We’ll have solid employment growth and we’ll have low inflation.”

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Air Canada facing pressure to retain Sask. to Calgary route – CTV News Regina

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Saskatchewan businesses and political leaders are expressing their disappointment over the cancellation of Air Canada flights from Regina and Saskatoon to Calgary.

The service will end in mid January but efforts are underway to convince Air Canada to maintain the crucial route.

“You know it’s disappointing any time that any of our two major airports lose direct air services to other major cities,” Minister of Highways and Transportation Jeremy Cockrill said.

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Air Canada has been flying between Saskatchewan and Calgary in competition with WestJet. The NDP opposition is concerned about the potential impact of having only one carrier remaining.

“I think there are [negative] impacts, you think of the last week we’ve had Agribition and Grey Cup here. That is very concerning,” NDP leader Carla Beck said.

Economic Development Regina (EDR) has sent a letter to Air Canada asking it to reconsider.

“We know as a city we need to be as competitive as possible and that also means as connected as possible, so losing connection to another hub in Western Canada is a bit of a challenge for us and we want to work together to restore that service,” CEO Chris Lane said.

Member of Parliament Michael Kram thinks the province is being shortchanged by Air Canada.

“Well it’s certainly very frustrating especially since Air Canada received about $500 million from the federal Liberal government during the pandemic in the form of the wage subsidy, so it’s very fretting that Air Canada has chosen to take the money and run,” Kram said.

There are several new low-cost air carriers in Canada that are now establishing a route system. Air Canada’s decision to focus on Montreal, Toronto and Vancouver could give the new players an opportunity to enter the Saskatchewan market.

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Ontario pharmacists get greenlight to prescribe COVID-19 treatment Paxlovid – CBC.ca

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Starting next week pharmacists in Ontario will be able to prescribe the antiviral drug Paxlovid as a treatment for COVID-19, the health minister said Thursday.

Sylvia Jones made the announcement at a morning news conference in Toronto, where she said the prescriptions will come at no cost to patients. The new policy takes effect December 12.

There are about 4,000 pharmacists in the province who are already dispensing the drug. The prescription program will work on an opt-in basis, so it is unclear how many pharmacies will choose to take part.

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Ontario’s chief medical officer of health said in a related statement the change will expand access to the medication, increase protection to the most vulnerable, and ease hospital pressures.

It’s a move Dr. Kieran Moore said last month the government was considering in part to help keep people out of hospital, especially in rural areas where access to primary care physicians can be limited.

The antiviral medication is taken orally within five days of symptom onset and is recommended for people at higher risk of COVID-19 complications, including people over 60 and people who are immunocompromised.

The announcement comes as hospitals in the province continue to strain under pressure from multiple respiratory illnesses.

Across all ages, the number of Ontarians going to emergency departments with respiratory complaints remains well above pre-pandemic seasonal averages, according to Ontario’s Acute Care Enhanced Surveillance (ACES) database.

Some pediatric hospitals have stopped surgeries and other procedures to maintain capacity for patients seeking care for respiratory symptoms.

Meanwhile, Ottawa’s children’s hospital has accepted staffing help from the Canadian Red Cross and opened a second pediatric intensive care unit, though others had not sought extra support as of this week.

Jones touted co-operation between pediatric and community hospitals one innovation helping to make sure more health-care professionals are trained to treat children with respiratory illnesses.

She also said it has been a difficult flu season and thanked health-care workers for their efforts under tough conditions.

“I really want to reinforce that these are incredibly dedicated, incredibly talented, educated people who have stepped up and continued to step up through what has been a very challenging virus season,” she said.

Throughout the surge in respiratory illnesses in Ontario, Jones has insisted that the province was prepared to handle it. With respect to steps some hospitals have had to take to deal with an influx of patients, both Jones and Premier Doug Ford have credited them with “thinking outside the box” and not doing “business as usual.”

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