How can I get life insurance that I can afford?
- Reduce the death benefit. If you were hoping to leave $200,000 to your loved ones when you die, you may have to reduce this to $150,000. This will reduce your premiums.
- Buy some cheaper term life insurance. This type of insurance cost lests than permanent life insurance. You can't build up savings, but you can get the same death benefit at a lower cost.
- Check your workplace plan. Take advantage of any insurance you get at work, either through your employer or your union. Most plans at work are group plans that offer term life insurance, as well as disability insurance and accidental death insurance. They may give you only a basic level of coverage. If you need more, you may be able to add more if you pay a bigger premium. This will likely cost less than if you buy extra insurance on your own.
- Look for discounts. Take advantage of any discounts you can get. Sometimes, if you buy more than one type of insurance from the same company, such as disability or critical illness insurance, you'll get a better price.
- Look for group options. See if any associations you belong to offer insurance. This includes college and university alumni associations, the Canadian Automobile Association (CAA), the Canadian Association for Retired Persons (CARP), and many others.
- Buy joint life insurance. If your main goal is to take care of a spouse after you die, you may save money if you and your spouse buy insurance together.
Example: You can buy a joint policy (one policy for two people). Or, you can choose a first-to-die permanent policy. This pays a cash benefit to the surviving spouse, no matter who dies first. This approach often costs less for couples than having two separate life policies.
Remember: You have to balance your priorities with your budget
Only you can decide what's most important to you. Only you can work out the best balance between cost and coverage.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.