Cost is always a concern, but insurance advice is often more important than insurance price.
3 ways to buy insurance
In person from a licensed insurance agent or broker
Online or by phone from a broker or insurance company
A financial adviser who is licensed to sell insurance
Some investment firms may also have a licensed broker on staff who can provide you with personal insurance advice and coverage.
You might be able to get a cheaper insurance quote online, but advice is critical. You or your family could suffer financially if you are under-insured.
Find an adviser or agent that you trust, and then get their advice on what types of insurance you need – and how much to buy. Be open about how much you can afford.
In most cases, the cost of the advice is built into the commission they earn on the sale of insurance to you.
Broker or agent: What’s the difference?
Some life insurance agents work for just 1 insurance company.
Other life insurance agents work for insurance brokers who can quote prices and tell you about products from a number of insurance companies.
All licensed agents are trained to assess your insurance needs and must follow a code of ethics that puts your insurance needs first.
Confirm if your agent is licensed: In Ontario, personal insurance agents are licensed by the Financial Services Commission of Ontario (FSCO). Most other provinces have a similar licensing body. You can confirm your agent’s licensing by doing a search on the FSCO website.
5 questions to ask before you buy insurance
- How does this policy meet your needs? Find out what it covers and what it leaves out.
- What does it cost? Ask how much the premiums are and how often you’ll pay them. Are you getting the best rate the insurance company offers? If not, ask why.
- Will your premiums change? Some don’t change, but others change each year or every few years. Your premiums may also change if your health changes.
- How long does the policy last? Some insurance renews each year. Depending on the policy, life insurance can last for a set number of years or for life.
- Does the policy let you build savings? If it does, your adviser may show you examples of how your money could grow over time. Ask how they worked out their examples. Ask to see how these examples would change if interest rates change, or if your investments don’t perform as well as your adviser expects.
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