We want to protect our loved ones, even after we’re gone. One such way in which we can accomplish this is by purchasing life insurance. By contacting a Calgary insurance broker, you can feel confident that your family will be looked after, despite your absence.

But what exactly is life insurance, and what does it cover? Let’s explore that below.

Understanding Life Insurance & Its Coverage

What is life insurance?

Life insurance aims to protect your family financially. By purchasing a policy, you are forming an agreement with a life insurance company, in which they will bestow a lump sum of tax-free money to the person of your choosing if you die. In exchange, you pay the life insurance company a set amount of money periodically; this amount is known as your insurance premium.

It is up to you how much money would be paid out to your beneficiary upon your death, which in turn impacts your insurance premium. Naturally, the more your policy is worth, the higher your premium will be.

What can life insurance be used towards?

Your beneficiary is able to use the life insurance death benefit in any way they choose. However, the money is usually put towards financial responsibilities that the policyholder would have contributed to while alive, such as the mortgage, bills, tuition, and other costs of living. The money also typically goes towards covering funeral costs.

What types of death are covered by life insurance?

Life insurance policies cover the majority of deaths, with few exclusions. As long as your policy is active and up-to-date at the time of your death, life insurance will cover:

Natural causes: This can include old age, illnesses such as cancer, and unexpected health conditions, such as a heart attack.

An accident: This can include a car accident or an accidental overdose on prescription drugs.

Suicide: This is typically covered, provided it occurs after the policy’s “suicide clause” period has ended. If your policy has this clause, its average lifespan is approximately two years.

Homicide: This is applicable unless the beneficiary has played a role in the policyholder’s murder.

What does life insurance not cover?

There are a few instances in which your own actions, or failure to act, can impact your life insurance coverage. You will not be covered if you die while engaging in criminal activity and may not be covered if you die while participating in a dangerous hobby, such as skydiving. Additionally, your eligibility is put at risk if you allow your policy to lapse or lie on your application.

It may surprise you how affordable life insurance is. For more information, reach out to your Calgary insurance broker today!

Lakeview Insurance Brokers Ltd. has been a highly dedicated member of the Independent Brokers Association of Albert and has been family-run since 1979. Our brokers take the time to ensure you get the best policy that suits your needs. Contact us today to get started at 403-287-2521 or send an email to [email protected]