For most people, buying life insurance can feel overwhelming and downright confusing. You need to know what kind of insurance to get, how much you need, and how long you’ll need it for. And because you don’t own a crystal ball or a time travel machine (yet!), these variables alone can make you feel uneasy about committing to a life insurance policy.
But the reality is that knowing what you need from a life insurance policy is just one piece of the puzzle. You also need to figure out which life insurance company you’re going to buy your policy from. This may not seem like a challenge at first. But when you start sifting through quotes, you’ll realize just how many life insurance companies there are out there. And for some reason, they often offer very different prices for what essentially looks like the same kind of coverage.
How do you cut through the noise so you can confidently choose the best insurer for your needs?
Here are 4 key things to consider when choosing a life insurance company:
Their product prices
If you fill up your car with gas at one of the major gas stations, you know you’re going to pay roughly the same price no matter where you go. But this isn’t how things work when it comes to life insurance. In fact, if you take a look at life insurance quotes, you’ll usually find wildly different prices across companies for the same type of coverage.
It’s easy to believe that if some companies are offering cheaper premiums than others, there must be a catch or something shady going on. After all, when you buy other products and services to protect your family—things like home security systems and daycare—you’re probably sceptical about the cheapest option on the table.
But in the case of life insurance, a cheaper price usually just means that the company is pricing a policy more aggressively to beat out their competitors. This works in your favour, especially if you’re buying term life insurance.
Think about it this way: if you buy term life insurance (usually a 10 or 20-year policy), you probably won’t die until after your policy ends. This means that you’ll be paying premiums for a death benefit that probably won’t ever get paid out. And because you aren’t paying premiums just to pad your insurers’ pockets, you’d want to pay the lowest premiums possible in this case.
That’s why we usually recommend choosing the cheapest life insurance company that offers the coverage you need.
Their financial strength
Life insurance is a long-term game—one that usually lasts at least 10 or 20 years if not more. So when you buy a policy from a life insurance company, you’re essentially entering into a long-term relationship.
Just like with a marriage or a business partnership, you want to join this relationship believing that you’ll be able to rely on the other party (your insurance company in this case) even decades down the road. After all, if you hold a 30-year term life insurance policy and you die 20 years into the policy, you want to be sure that your insurance company will still be around to pay out your death benefit.
Fortunately, you don’t have to worry too much about verifying the financial strength of a Canadian insurance company. This is because, in Canada, life insurance is heavily regulated and supervised by the government. And as a result, insurance companies in Canada are typically in excellent financial shape.
Plus, you’ll be protected by Assuris too. Assuris is a not-for-profit organization that protects you in the incredibly unlikely event that your insurance company fails. It’ll either quickly transfer your policy to a healthy insurance company or guarantee that you’ll keep at least 85% of your insurance benefits.
In short, you can assume that you’ll have reliable life insurance coverage no matter which company you choose.
The products they offer
When buying life insurance, you want to choose an insurer that will give you the best protection possible and the most flexibility for the future. This means looking for a company that offers robust coverage, the option to renew your policy down the road, and few exceptions and exclusions. You also want to avoid companies that attach words like “simplified’ or “guaranteed” to their policies.
Their customer service
Like we said earlier, your relationship with your life insurance company is a long-term relationship. And if you die while holding your policy, your beneficiary will have to work with your insurer when they file your claim. For this reason, you want to choose a life insurance company that’s known for providing excellent customer service. However, be aware that claims can be denied for the slightest reasons and you may end up needing the services of a life insurance attorney to get your claim validated.
As of now, there’s no Yelp for insurance companies in Canada. So it isn’t easy to find customer reviews. But you can look a company up on PolicyMe’s life insurance reviews here or the Better Business Bureau website or ask friends or family members about their experiences. (Let’s hope they’ve had good ones!)
- Choosing the insurer that’s right for you
At PolicyMe, we’re on a mission to make life insurance simpler, easier, and faster for Canadians to get. That’s why we’ve made sure that the life insurance companies we work with are in excellent financial shape, have solid customer service, and offer all the standard options and features you’d want in a term life insurance policy. We also work with a range of companies to give you access to affordable options.
Take our online life insurance checkup today to get a free personalized life insurance recommendation and competitive quotes from the best insurers in Canada here. All it takes is just 5 minutes!