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Introduction to personal insurance

Five types of personal insurance Add to ...

There are 5 basic types of personal insurance, and each serves a different purpose.

​Insurance product​How it works​Benefits to you
​1. Life insurance

 

 

 

​Pays a tax-free, lump-sum amount to your named beneficiaries upon your death​Ensures your named beneficiaries can pay off your debts and maintain their standard of living after you die
​2. Disability insurance

 

 

 

​Provides a monthly payment that replaces part of your lost income if you’re unable to work because of illness or injury​Allows you to maintain your standard of living if you are disabled and unable to work
​3. Critical illness insurance

 

 

 

​Pays a lump-sum amount on the first diagnosis of a serious medical condition (e.g. cancer, heart attack) covered by your policy​Allows you to cover additional costs associated with an illness, or use for any other purpose during or after recovery
​4. Long-term care insurance

 

 

​Provides cash payments if you require care in your home or in a private or government facility​Allows you to cover some or all of the costs of long-term care instead of using your savings
​5. Health insurance

 

 

 

​Covers a portion of health care costs not covered by your provincial health insurance​Gives you and your family affordable access to the health care you may need – at home or out-of-country


Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

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