Estimated reading time: 17 minutes
I recently had the opportunity to Interview Tobin Tuff, the Senior Life Insurance Advisor at PolicyMe.
If you’ve ever questioned whether you should get life insurance, keep reading.
As part of my Estate Planning education for CBB readers, I wanted to learn about digital life insurance.
Until I moved to Canada, I did not pay into life insurance in the UK; however, Mrs. CBB has had life insurance since her 20s.
I went to the source to learn about PolicyMe, a digital life insurance company.
Life Insurance Affordability
Often Canadians skip over life insurance in their budget for many reasons.
If it’s not mandatory, then it’s not a necessity that has a place in a budget.
For example, you need house insurance and can’t opt out if you own a house.
Renters’ insurance, for example, is optional, so it often gets swept under the carpet unless it’s a requirement from the landlord.
Life Insurance Is Affordable With PolicyMe
The “It won’t happen to me” mentality does not put on the back burner or dismissed.
Life insurance is not high on the life list as it’s something that’s not affordable with a tight budget.
Despite this belief, life insurance is very affordable.
Certain health conditions or factors, such as smoking, may increase a policy premium.
When something happens, we hear, “Did he/she have life insurance?“.
Once we quit smoking for one year, our life insurance premiums dropped significantly.
If you aren’t sure about life insurance, take a few minutes to read what PolicyMe is all about.
You may find that you can squeeze a PolicyMe life insurance policy into your budget.
Also, having peace of mind that those left behind will have more than enough to look after themselves.
Reasons Why Canadians Might Not Have Life Insurance
Below are some common reasons why life insurance is not essential to Canadians.
- My employer will pay my family a year’s income if I die. (Is that enough?)
- I can’t afford life insurance. (It’s cheaper than you think)
- Not understanding what life insurance is all about. (This post will certainly help those looking for answers).
- They have mortgage insurance that will pay off the remainder of the mortgage if they die.
- I don’t need life insurance. I’m single with no dependents.
- Life insurance isn’t worth it.
- I probably won’t get life insurance because I have health problems. (You never know if Mrs. CBB has life insurance and health problems.)
- Life insurance doesn’t matter once I’m gone.
- There’s enough money in my Tax-Free Savings Account and RRSP.
- Our savings will be enough to get the family by
- Life insurance will never pay out because they will find a loophole
- I don’t care about life insurance.
Newcomers To Canada And PolicyMe Insurance
Since moving to Canada from the UK, I’ve had to learn about the life insurance system.
I’ve educated myself in just about anything that I needed to know to get by in Canada.
Whatever I wanted to know meant I went straight to get answers about the importance of life insurance.
I came into life insurance from a newcomer perspective and have never looked back.
The need for life insurance for our family was a must, and today Tobin Tuff is going to answer your questions.
Thanks to the CBB readers for sending in their questions for PolicyMe.
Thanks to Tobin from PolicyMe for taking the time to chat with us.
Let’s learn more about digital life insurance with an exclusive Q & A session below.
1. Who is PolicyMe, and how has digital life insurance changed traditional life insurance applications?
We’re an online life insurance company that offers the same underwritten policies you would find at any other large company, except we’ve put the entire process online.
Traditionally, the process is much longer and tends to be more expensive.
You’d have to see an advisor, which involves several phone calls and a lot of back and forth.
We’ve put the medical questions online, so you’ll be able to receive an instant decision, whether that be approved, declined, or you’d need a medical visit.
By cutting out many inefficiencies, we can provide more affordable policies.
Instead, we have given you the tools by putting all the information online and have made it convenient for you to complete an application on your own time.
We are making it easier for you to apply, even with a busy schedule and kids.
We’ve brought a significant change to fully salaried, non-commissioned advisors, who are just here to help answer your question.
We fixed the many inefficiencies in the life insurance process and passed those savings back to you through a more affordable policy.
On average, PolicyMe rates can be roughly 10% – 20% lower than other insurers in Canada.
We offer the lowest prices in the industry, if not the lowest, just by putting it online.
It’s the same guarantee, the same fully underwritten guarantee that you would get on any other policy in Canada.
2. Are traditional life insurance agents charging hidden fees?
Generally, there aren’t hidden fees in life insurance policies in Canada, as long as we’re talking about the fully underwritten type of policy.
The agents or advisors you meet with traditionally and purchase a policy receive commissions, but they are not hidden.
They don’t get to set those prices, as it’s all built into the premiums.
That’s why premiums can be slightly higher for companies because some have higher premiums.
After all, it is a “fee” for the advisor, part of their commission.
At PolicyMe, our advisors are non-commissioned, so we can cut those fees.
Investing With A PolicyMe Premium
3. Do you offer life insurance policies where you can invest part of the policy? Whole life?
We currently don’t offer whole or universal life policies; usually, policies you can invest in.
These policies are pretty popular amongst advisors, but they are pretty expensive.
For many people, if you have the time to plan, you can generally do better investing on your own.
If your purpose is to grow your wealth, then I recommend doing that through registered accounts, RRSP, or TFSA.
If you invest through that, you’ll likely end up with more than if you had the equivalent investment in a permanent policy.
Usually, when you can select your investment selection and, say, a whole life policy or a universal life policy, fees will be associated with it.
Those fees are always slightly higher than what you would get if you invested traditionally.
So even apples to apples, you’ll still end up with more if you invest traditionally.
Replacing Or Adding PolicyMe Life Insurance
4. How easy or difficult is it to get life insurance with PolicyMe if you already have life insurance with another company?
There are two ways of looking at it if you’re replacing or adding a policy, and you can do both easily.
If you decide you want more, it’s interesting to know that in the background, everyone has a maximum amount of insurance they can have on themselves based on income and age.
The younger you are, and the more income you make, the more you’re eligible for in the background; you’re invisible maximum.
When applying, the company will ask you if you have another policy; the life insurance company may restrict the policy amount.
Besides, it’s easy to get an additional policy.
The second way is if you’re replacing it, which is simple, always do your research.
It’s critical to ensure that you have the best policy with the proper coverage.
Storing Your Life Insurance Policy
5. Should life insurance policyholders keep a copy of their policy in a fireproof safe?
I would never advise you not to do that. If you have a fireproof safe, throw it in there.
However, you’ll be pleased to know that the contract is not void if you lose it.
The only thing that matters is that premiums continue to be paid by the owner.
It’s all about if your beneficiary knows and keeping your family updated so your beneficiary knows there’s a policy in place.
If you did take a policy out on yourself and didn’t tell anybody, and then you lose your policy in a fire, that fireproof safe is going to be the only thing that lets your beneficiaries know that you have a policy.
They can contact the company to claim it.
Proper storage of the documents is good, mainly for those you leave behind if you did pass away early to make sure they know there’s a benefit to be claimed.
Purchasing Life Insurance
6. Who needs life insurance?
There are two essential things to consider when deciding whether it’s time to purchase life insurance or not;
- If anyone else relies on your income
- You are in any debt that may come after your survivors
If either of these applies to you, then it’s time to consider life insurance.
Some scenarios include having dependents owing specific amounts of money, having mortgages, lines of credit, business arrangements, etc.
Ask yourself, “If I disappear tomorrow, is anybody going to be hurting financially?” And usually, you’ll know the answer to that question pretty quickly.
Life Insurance For Single Individuals
7. Do you need life insurance if you are single?
The same thing applies here. If you passed away tomorrow, would anyone be financially burdened?
If so, then life insurance would be necessary. For example, if you take care of your parents or want to make sure it covers the expenses for a funeral.
This is the right path if someone needs your money and you care about them.
PolicyMe has announced an exciting product update that will greatly benefit many of your readers.
They have just announced a couple’s discount going live on November 15th. The promo details are as follows:
What it is: PolicyMe’s Joint Application allows couples to apply together online to 1save 0% off the first year of the policy.
How it works: Each partner completes their life insurance application online, which takes about 20 minutes each.
Once approved, they can activate each respective policy while saving 5% on their policies.
How coverage works:
- If either partner passes away during the term, the coverage amount is paid out to their beneficiary.
- If both partners pass away during your term, coverage amounts are paid out to their respective beneficiaries and the policies are no longer active.
- Additionally, they recently published an article discussing the stress of inflation within Canada and how Canadians can best protect themselves against it.
- You can find it here to learn more.
Life Insurance For Children
8. Should a child get life insurance? If yes, what age and costs are involved?
I don’t generally recommend life insurance for children, and that’s because life insurance is for those who have people who depend on them.
There are things called riders, which we sometimes recommend for life insurance, where you can add coverage for children.
Getting their policy is one thing in comparison to adding coverage for children.
That’s another sort of luxury. And that’s purely for you, the policyholder. If your child were to pass away unexpectedly, you would likely need to take some time off work.
If your job wasn’t, you know, going to accommodate that financially, here’s a little cushion for you.
Everything it achieves for a child may be far more successful through other means.
The growing cash values of having the coverage in place, all those things can be better served by opening a savings account for them and putting those premiums in there instead.
Because there’s no immediate need, other than if you need some financial help if your child were to pass away, maybe pay for their final expenses, their funeral.
In that case, we would recommend a child rider which you can add to your term life insurance policy. And that covers a small amount.
Medical Exam For Life Insurance With PolicyMe
9. Do you need a medical for life insurance with PolicyMe?
It depends. Typically, you’d have a nurse call, have this conversation, talk about your health, and answer all these medical questions.
And then, about a week later, we’ll come back and determine if you need a medical.
PolicyMe still does this process, but we do the medical questions upfront, online, and tell you immediately if you’d need a nurse visit or not.
So yes, in some cases, you will need them. We can provide you with that information faster than a standard policy.
You can decide not to move forward, and there’s no harm.
In most cases, you won’t need a visit, but complications such as heart problems would trigger a nurse visit.
Additionally, this is the exciting part, and we’re constantly talking with our underwriters and reinsurance companies, trying to change these rules and make nurse visits less and less frequent.
Applying For Life Insurance
10. Is everyone entitled to apply for life insurance, or are certain people who cannot? Ex: heart disease and other diseases.
Everyone’s entitled to apply for life insurance; sometimes, you just might be declined.
Underwritten life insurance is only for currently healthy applicants or people who are now stable.
So if you’re undergoing any unusual procedures, any life insurance company will ask you to come back at another time.
So that’s pretty much how it goes industry-wide.
There is no medical life insurance; if you wouldn’t qualify for underwritten, you could apply for this.
However, underwritten insurance is much cheaper, so it’s the best fit for healthy applicants.
If you’re not sure, always check, and don’t hesitate to reach out to a company and ask them.
Advisors, the agents on the phone, aren’t taking notes. We’re just here to try and give you information.
And from what we’ve seen, we can tell you the likely outcomes based on similar cases.
Critical Life Insurance – Necessity or Not?
11. Do you offer critical illness life insurance? Who needs this?
We don’t currently offer critical illness insurance, but it’s a great product we’ll likely add.
For those who are unfamiliar, critical life insurance provides additional coverage for those with medical emergencies and pays out in a lump sum if diagnosed with certain medical conditions.
It can help relieve financial pressure if you become ill, and it would also help cover all the extra medical care that the government doesn’t, for example, some treatments and home care.
Average Costs Of Life Insurance
12. What are some average costs for life insurance?
It’s challenging to say the average cost of life insurance because several factors go into it.
Some life insurance is always better than none, so the best starting point is to identify how much your recommended coverage would be.
Then take a look at the premiums; if that’s out of your budget, you will reduce them.
To minimize the tips, you have two options, reduce the coverage or the term length.
For example, if you’re a 34 male non-smoker seeking $500,000 for 20 years, it would be approximately $31.29.
If that’s out of budget, you could try for ten years, which would drop to $20.46/month.
However, If you were to get a new one at age 44, it would be approximately $40.15.
Even so, you’re taking on the risk that you may become uninsurable or not as healthy and get worse rates by the time that happens in 10 years.
Another option is to reduce the coverage amount but keep the term length.
You can check out pricing differences by getting a quote on our PolicyMe website.
Beneficiary With PolicyMe Life Insurance
13. How do you decide who the beneficiary will be? What if they pass away?
It’s usually pretty easy to determine who your beneficiary should be because, in almost all cases, it will be your spouse or your kids.
Despite this, if you’re confused, call the company that holds your insurance policy. They’ll be able to give you some direction based on your scenario.
If this does not apply to you, for example, if you have life insurance because of a loan, liability, or final expenses you don’t want your parents to pay for, the beneficiary would be your parents or your best friend.
Nevertheless, there would be contingent or secondary beneficiaries if they were to pass. Depending on the company you’re talking to, they mean the same thing.
This person would receive the insurance payout if the primary were to pass before the policyholder.
Types Of PolicyMe Insurance Available
14. What are The types of life insurance PolicyMe provides, and how do they protect the policy’s owner?
We currently only provide term life insurance, with coverage from $100,000 to $5,000,000, and term length policies vary from 10,15,20,15, and 30 years.
They help protect your dependents, whether parents, spouses, or children, from financial burden if anything happens to the owner.
Importance Of Life Insurance
15. What are life insurance policies and their importance?
That’s one of the most critical questions of all. It’s essentially a contract between you and a company that the company agrees that if you pass away within a given timeframe, they will pay out this entire amount to whoever you choose.
Its significance is trying to offset the financial burden for your loved ones if something happens to you.
The emotional pains will always be there but taking away that financial distress changes the course of somebody’s life. And that’s why life insurance exists.
That’s why we’re here, to do our best to ensure that no one finds themselves in a terrible scenario where they have to rely on donations to get by.
No one expects to pass away before their time, so it’s always a sad story.
That’s why term life insurance costs are so low because most people will make it to life expectancy. And for a small cost that doesn’t have to affect your loved ones financially.
Great advice that we learned about was mortgage life vs. term life insurance.
For example, with PolicyMe term life insurance, if one of you were to pass away, we’d ensure your policy had enough to pay off the mortgage.
If you were to get mortgage life insurance, the payout would only pay what is left owing on the debt.
PolicyMe Puts People First
16. Why should readers choose PolicyMe?
PolicyMe is on a mission to put people first, protecting them with the honest and uncomplicated life insurance they deserve.
As Canada’s leading online life insurance company, we give families a straightforward way to buy term life insurance in minutes and at the most affordable price.
We have simplified all the unnecessary bells and whistles we have passed on the savings to our customers, making our rates, on average, roughly 10% – 20% lower than other insurers in Canada.
We understand that many people out there prefer to work closely with an advisor.
While we don’t do face-to-face meetings, you can speak to an advisor over the phone at PolicyMe; they’re all non-commissioned.
We’ve put all the tools upfront for you to use, putting all the information online, helping you have a clearer image of how much coverage you need through our recommendations tool, and giving you an immediate instant decision.
The power is in your hands, and you can apply for whichever coverage amount you want. We’re not going to try and swerve you in a different direction.
That doesn’t exist in the industry, and other companies have you meet with an advisor.
Unfortunately, you’ll find commissioned advisors at other companies have turned too many people trying to make sales and baking commissions into premiums.
It’s lost touch, in many cases, with what the roots of it indeed are, which is just protecting people, and we want to bring it back to that.
Discussion: Do you have life insurance? Why or why not? Please leave your questions and comments below.
Check out Policy Me and see if it’s something that would suit your budget and life goals.