2. Non-medical life insurance policies often have bigger premiums but smaller face amounts than the standard life insurance policies. These type of policies are normally restricted and only pay out the equivalent of the fees paid plus interest if cashed in the first two years. These non-medical insurance policies are designed for people primarily with significant health issues.
3. Stay away from accidental death insurance. Many Canadian life insurance companies heavily market accidental death insurance to unsuspecting members of the public. Whilst they may seem like a great idea when you are obtaining them, be aware that less than 3% of insurance claims are due to accidental death. When looking at the same term plan benefits, most of the time the accidental death policy is more expensive.
4.Be watchful of agents that are only permitted to sell their own companies policies - captive agents. The first problem with these agents is that their schemes usually have a bigger premium than the independent agents. Captive agents are not able to shop for the best value for you, and in some instances may not offer the product best suited to your needs.
5. Costs involved with the initial premiums can be off putting, but when looking at your life insurance premiums, total up the total cost instead. Lots of insurance businesses try to lure customers with low initial premiums. Term insurance schemes, which offer low initial premiums that get bigger as the insured ages, are appropriate if used for temporary insurance needs. Whilst schemes are offered to the public in the belief that we all have the same requirements, this is definitely not the case. As individuals, insurance businesses, need to look at what the consumer needs.
6. Read the small print of your plan for the exclusions ; one of the most accepted is the two year suicide exclusion. But many policies also carry many travel or recreational activity exclusions if the applicant was engaged in these activities at the time of application. Each insurance organization has its own underwriting guidelines, so the best defense is to find a broker who works with multiple carriers and is up to date on the different underwriting protocols.
7. Although insurance businesses can't contest the information you put on your application, usually after two years (standard incontestability period of Canadian life insurance products), it won't stop them pursuing you on criminal charges if you lie or avoid filling in the application properly. During this time, insurance businesses can contest a claim for misrepresentation or not revealing a material fact.