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Both types of insurance can protect your loved ones and their futures, but not all life insurance policies are the same. Different products have features that can help you meet your personal needs and goals, whether you’re growing your family, getting ready for retirement, or just planning ahead.

Key takeaways

  • Life insurance helps protect your loved ones from unexpected costs when you pass away.
  • There are two main types of life insurance: term and permanent life insurance.
  • Term life insurance provides coverage over a fixed amount of time with often affordable monthly or yearly payments. However, your beneficiaries won’t receive a payout if you live beyond your policy’s term.
  • Permanent life insurance costs more upfront but covers you for life, even if there are changes in your health.
  • Some permanent life insurance policies also work like investments. If you cancel early, you can receive the policy’s cash value.

Life Insurance Basics

Life insurance is a great way to help your loved ones meet financial goals or commitments, after you pass away. It’s also a way to ensure they’re able to:

  • Pay for final expenses, such as funeral costs
  • Pay off a mortgage or other debt
  • Cover the costs of raising children
  • Put aside funds for retirement

There are two basic types of life insurance: term and permanent. The cost of your life insurance policy depends on your personal situation, factoring in things like your age, gender, health status, habits (like smoking and drinking), and any activities that may be considered risky (like motorcycling). However, in general, term policies are more affordable than permanent ones.

It’s important to note that not everybody is insurable. There are instances where something like a pre-existing health condition may affect eligibility to buy life insurance. However, there could still be options, like guaranteed life insurance policies that offer a lower death benefit (the amount paid out by the life insurance company) at a higher premium.

What is term life insurance?

Term life insurance is often the most straightforward and affordable way to get coverage. You pay an affordable premium (a regular monthly or yearly fee), and in return, receive life insurance coverage for a defined amount of time (called a term), such as 20 years. When your term ends, your insurance fees also end, and your loved ones are no longer eligible to receive a death benefit when you pass away.

Term life premiums

With term life insurance, you choose how long you’d like to pay premiums for, such as 10, 20, 30 or 40 years. The length of your term and the amount of coverage you choose affects the price you’ll pay each month, which could be as low as $13 a month[1] (paying for policies yearly is also an option). While coverage is temporary, you may have options to convert to long-term coverage later if needed.

Benefits of term life insurance

There are many benefits to term life insurance, including:

  • Flexible terms: Flexible policy terms commonly range from 10-40 years.
  • Affordable rates: Monthly or annual fees are guaranteed to stay the same for your entire term.
  • Accessible policies: Medical exams may not be required depending on your policy and terms.
  • Customizable add-ons: Policies can be adapted to meet changing needs over time or include coverage for children (such as a children’s term rider, which provides life insurance for children as well).
  • Tax-free death benefit: Your beneficiaries will receive a lump sum, tax-free benefit if you pass away, offering extra stability at a critical time.
  • Convertible options: Some policies have the ability to convert to a permanent or universal life insurance policy before the age of 71, with no health or medical exams needed.

Drawbacks of term life insurance

Terms can run out: Living beyond your term means your policy ends without your beneficiaries getting a benefit payout. However, there may be options to continue or renew your policy or convert it into a permanent policy.

Eligibility can change: As we age, our health circumstances also change. Buying life insurance when you’re younger can make policies more affordable. For example, term insurance is usually easier to qualify for when you’re younger and may be more challenging to qualify for when you’re older, or become more expensive to buy.

Life insurance plans for as little as $13/month

What is permanent life insurance?

Permanent life insurance covers your entire life, regardless of your age, how long you live, and your health status. Depending on the policy it can also help with estate planning needs, like costs associated with transferring assets to your partner or kids. Permanent life insurance premiums can be paid monthly or yearly, just like term insurance, but coverage remains in place when your payments end. Like term insurance, buying life insurance when you’re younger and healthier can make policies more affordable. If you cancel a permanent life policy before your death, you’ll receive the cash value of your policy (minus any fees from managing the plan associated with the policy).

Some permanent policies also allow parents or grandparents to transfer a life insurance policy to a child. That way, they have life insurance coverage as they grow up, and if the child develops an illness or health condition that would make them uninsurable.

Common types of permanent life insurance are:

Participating Whole Life Insurance: These policy premiums and benefits don’t change over time. Because you’re paying into the policy it can be structured so that it’s paid up (reaches full value and monthly payments end) after a certain period of time, like 10 or 20 years, or once you reach 100 years old. Once a policy is paid up, coverage still remains in place. With participating whole life insurance the policy’s invested assets are professionally managed by the insurance company, not the policy holder.

Universal Life Insurance: These flexible policies allow you to update policy premiums and benefits over the years. They can be structured so that you overfund your policy (pay more than the minimum monthly fees required) earlier in life to raise the cash value up front, and offset the cost of premiums later. This can be really helpful for people anticipating retirement or another fixed-income situation down the road. With universal life insurance the policy holder is involved with managing the assets in the policy.

T100 permanent life insurance: This type of permanent life insurance policy covers you for life but without the investment and cash-value benefits of other permanent policies. Like term policies, you pay your monthly or annual contribution fees and are covered.

Benefits of permanent life insurance

Permanent policies have a range of benefits, on top of paying out a benefit when you pass away. Additional benefits include:

  • Dividend reinvestment: The dividends you earn in the policy can be reinvested, increasing the value of the policy’s death benefit over time. As the value of your death benefit grows, so does the cash value of your policy.
  • Tax-deferred growth: Your policy’s annual cash value can grow without incurring annual taxes, but it is subject to limits set by the Income Tax Act.
  • Options to use your cash value: You may request to use your policy as collateral for a loan from a financial institution, subject to the lender’s requirements. You can also access the funds in your policy to supplement retirement income or if you have an illness.

Drawbacks of permanent life insurance

As these policies last your lifetime, they tend to cost more than term life insurance, making them less affordable in the near term.

What are the differences between term insurance vs. permanent life insurance?

Below is an overview of the differences between RBC Insurance term and permanent life insurance policies and some answers to common questions.

 

Term Life

Permanent Life

Coverage Timeframe

Usually varies: 10 to 40 years, with the option to renew for another term

For life

Coverage amounts

$50,000 – $25,000,000

Amounts depend on type of product and age of the insured.

$25,000 to $25,000,000

Medical Exam

May, or may not, required depending on the term product

Typically required

Tax-free death benefit

Yes*

Yes*

*Note that probate fees are applicable if you have not designated a beneficiary and the proceeds of your policy become part of your estate.

How Do I Know Which Policy Is Right For Me?

While both permanent and term life insurance provide a payout when you pass away, permanent life insurance offers additional benefits that may be worth the additional cost to you.

Here are some questions to consider when choosing a life insurance policy:

  • Do you want the guarantee of life insurance coverage in place for as long as you live?
  • Are you concerned that you may become uninsurable over time?
  • Are you seeking an additional tax-deferred growth opportunity to build up savings beyond your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP)?
  • Are you more interested in ensuring affordable life insurance coverage now, versus a product that combines insurance and investing?
  • Will you only require life insurance coverage for a defined period? For example, you might want to ensure you have funds available to pay the costs of your child or children’s post-secondary education or to cover your remaining mortgage balance.

Term Life Insurance

Permanent Life Insurance

Universal Life Insurance

Participating Whole Life Insurance

An option for shorter-term needs if:

●      Others depend on your income

●      You have debts that need to be paid off in the event of your death

●      You are in need of a cost-efficient solution

An option if in addition to lifetime insurance coverage:

●      You’re looking for a tax-deferred growth opportunity

●      You want to take a hands-on approach to managing the investment risk of your life insurance policy

An option if in addition to lifetime insurance coverage:

●      You’re looking for a tax-deferred growth opportunity combined with the comfort of guarantees

●      You want to take a hands-off approach to your life insurance policy by benefiting from the investment expert

Common Questions:

How long does a life insurance policy last? Permanent life insurance provides coverage for as long as you’re alive, regardless of age or health status. Term life insurance covers you only for a specific period, known as a term, such as 10, 20 or 30 years. As you age, term insurance may be more challenging to qualify for and more expensive to buy.

What do life insurance premiums pay? With both types of policies, you’re entering into a contract with an insurance company to pay the death benefit you’ve agreed on if you die while the insurance coverage is in force. This death benefit can range from $25,000 to $25 million, depending on your selected coverage level.

Is my life insurance policy considered an investment? In addition to the guaranteed death benefit, some permanent insurance policies, such as Universal Life and Whole Life, include an investment component. This component, called the embedded cash value, grows without being taxed yearly. You can use the cash value as an emergency fund by withdrawing or borrowing against it before the person insured under the policy passes away. If you withdraw or borrow from the policy, some income tax might be payable.

Will my beneficiaries need to pay taxes? When the person insured under the policy passes away, the beneficiary will receive a lump sum death benefit that isn’t taxable.

Will I need to manage my life insurance policy? Different options are available, depending on how hands-on you want. Some permanent life insurance policies that include investment options, such as RBC Growth Insurance® are managed by RBC Insurance, so you can be hands-off and let the company manage ongoing changes.

Your financial situation is unique to you and your family. Connecting with a licensed insurance advisor can help you ask the right questions and develop a personalized plan that will ensure you make the right choice. Speak with an RBC Insurance Advisor by calling 1-888-925-0946 or Have an Advisor Call Me. Want to speak with an advisor in person? Find an Advisor or Store

 

RBC Life Insurance

Protect Your Loved Ones With Dependable Life Insurance

Learn More

*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

1. Rate based on a $100,000, Term 10 policy for a male, age 37, non-smoker. This does not constitute advice. Please speak with a licensed insurance advisor for more information on what coverage is suitable for your needs. Subject to policy exclusions. Underwritten by RBC Life Insurance Company. The information within this site is not intended to provide tax advice. You should seek independent tax advice from a tax professional or advisor.

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Life Insurance Managing Money Wealth Planning

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For many, it’s a time to double down on values and build a strong foundation for the future, but there are many reasons to consider life insurance right now as part of that plan.

Life insurance can be an important part of short and long-term financial planning. Starting early can help you find financial security and protect all that you’re building and working towards now, with other benefits, like more affordable monthly rates and investment growth.

Key takeaways

  • Life insurance is a great way to protect your family’s financial future even when you’re young, by ensuring they can financially support themselves if you’re gone.
  • It may be more affordable to buy life insurance in your 20s and 30s, when you’re likely younger and healthier.
  • Short-term financial benefits can include affordability and coverage without a medical exam, for peace of mind as life changes and your family grows.
  • Long-term financial benefits can include better eligibility (coverage even if you wait until later in life and develop health issues) and ways to grow wealth through investment opportunities.

Why should people in their 20s get life insurance?

Younger people might consider life insurance for the following reasons:

Lower premiums

Life insurance premiums, the monthly or annual fees you pay now to keep your coverage active, are often lower for younger people. It can be much more affordable to have purchased life insurance when you’re younger, than when you are in your 40s or older.

Easier to get approved

There are many factors that affect life insurance premiums but your age and your health are arguably two top factors, so why not lock in low premiums now? When you buy a term policy the rate is set and you pay the same premium for the duration of your policy term.

You plan to own a home

Carrying a mortgage can feel daunting when you’re starting a family and money is tight. Life insurance includes benefits that could help your family cover mortgage costs and afford to stay in your home if something happens to you. Plans that offer investment opportunities can also add equity to your estate and give you more options for getting loans or paying down debts later.

You are getting married or starting a family

Protecting your family goes beyond baby-proofing the house. Life insurance is a way to safeguard your new family’s financial stability, now and in the future, so you can all sleep better at night.

How does life insurance in your 20s and 30s protect your loved ones?

Immediate benefits: You’ll have peace of mind knowing that if something happens to you now, any expenses related to your death will be taken care of. Your loved ones will receive a death benefit, a lump sum of tax-free or tax-deferred money when you pass away. Death benefits can help cover funeral costs and expenses and cover your debts. For example, public student loan debts are forgiven when you die, but private loan debts may still need to be paid off.

Long-term benefits: Signing up for a life insurance plan early means costs will be more affordable over the years. This can help during a time of life when daily expenses can be high, like when you’re paying for daycare costs or rent. Even if you don’t have a family but plan on starting one someday, you can rest easier knowing you’ve planned for their financial stability.

Permanent life insurance plans can have additional long-term benefits. They can help grow your wealth over the years, with a portion of your premiums invested. It can also help with estate planning by covering some of the government taxes and fees that arise when you pass away, and your assets are transferred to loved ones.

 

Life insurance plans for as little as $13/month

What life insurance options are available to younger people

Depending on your goals and life plans, life insurance companies have different options to meet your budget and life stage.

Types of life Insurance

Term life insurance: Term life insurance plans are more affordable plans over a set amount of time (called a term), usually between 10 and 40 years. Coverage expires when your term is up but can be converted to permanent plans later. Term insurance is a popular choice for people at a younger age who may want a lower monthly cost now, as they’re paying off debts or planning other life purchases.

Permanent life insurance: Permanent coverage costs more upfront but covers you for life. Different types of permanent life insurance plans are available including Whole Life, Universal, and T100. Some permanent plans offer investment opportunities to grow wealth as you protect your family.

  • Whole life insurance: Provides lifetime coverage, with monthly fees that won’t change over time. You will still be insured for life, even when your payments end. This can be an option for people who take a “set it and forget it” approach to their finances and investments.
  • Universal life insurance: A more flexible permanent plan that allows you to update your premiums and benefits over time as life changes. This can be an option for people who want to be able to shift plans and enjoy being hands-on with investments.
  • T100 life insurance: A straightforward permanent plan where you pay a fixed amount each month or year for life and no longer need to pay a monthly premium when you reach 100.

Questions to ask when considering what life insurance is best for you:

Do I need life insurance if I don’t have kids?

Life insurance can be an important part of your financial plan, even if you don’t have kids. It can cover expensive funeral costs, debts like private student debts and bank loans, and relieve the financial pressure on other family members or friends. If you do have kids in the future, you can list them as beneficiaries on your plan at any time.

What if my goals change over the next 20-40 years?

You can update your beneficiaries at any time throughout your life, so if you have a new partner or more children, you can ensure everyone is protected.

Can I change my life insurance plan over the years?

Permanent life insurance plans can be adapted over the years. You can pay your set premium or decide to pay more into your plan to increase its value or end its term early.

Will the amount I pay monthly change over the years?

Both term and permanent plans have set monthly payments that won’t change over your lifetime. However, some permanent plans have the option of changing the amount you pay and your coverage.

What is the best age to buy life insurance?

There is no best age to buy life insurance, but purchasing a policy in your 20s and 30s has many benefits, like more affordable costs. It’s usually more affordable to purchase a plan when you’re young and healthy rather than waiting until later when you may have developed health issues.

How to decide what options are right for you?

Getting a policy earlier in life may help you save money, plan for your family and invest in your future. A licensed insurance advisor can help you ask the right questions and develop a personalized plan that will ensure you make the right choice for you and your family.

Speak with an RBC Insurance Advisor by calling 1-888-925-0946 or Have an Advisor Call Me.

Want to speak with an advisor in person? Find an Advisor or Store.

RBC Life Insurance

Protect Your Loved Ones With Dependable Life Insurance

Learn More

*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

1. Rate based on a $100,000, Term 10 policy for a male, age 37, non-smoker. This does not constitute advice. Please speak with a licensed insurance advisor for more information on what coverage is suitable for your needs. Subject to policy exclusions. Underwritten by RBC Life Insurance Company. The information within this site is not intended to provide tax advice. You should seek independent tax advice from a tax professional or advisor.

TORONTO, May 2, 2023 – Inflation and market volatility continue to hammer at Canadians’ spending and savings, so when it comes to estate planning, a large majority want to maximize the inheritance left to their loved ones, be it by avoiding unnecessary estate fees (87%) or minimizing out-of-pocket settlement costs (86%) according to a recent survey by RBC Insurance. This is particularly true among those 55+ (93% and 91% respectively).

However, the findings also suggest there is a lack of planning and prioritization among Canadians when it comes to preparing their estate, which not only jeopardizes the value of the inheritance but also places potential hardship on beneficiaries.

“Estate plans are important to ensure loved ones aren’t left feeling overwhelmed when managing your end-of-life finances,” says Selene Soo, director of Wealth Products for RBC Insurance. “This includes paying out-of-pocket for funeral arrangements, mortgage payments, utility bills, and lawyer fees, among other things.”

What happens to your money after you die?

Many Canadians don’t have a clear understanding of what happens to their money after they die, revealing a lack of knowledge about important aspects of wills and estate planning:

  • 61% don’t feel knowledgeable about or have never heard of the probate process
  • 62% don’t know that having a will does not prevent an estate from being taxed after death
  • 57% aren’t aware that estate taxes may be reduced by insurance policy benefits, which offer opportunities for your inheritance to bypass probate

This awareness gap makes it more difficult for Canadians to set up their estate advantageously through financial products and services that can help to leave the legacy they intended. For example, only 25% say they are knowledgeable about segregated funds, an investment solution that can help maximize an inheritance by reducing estate fees, since the funds bypass probate and are paid directly to an appropriate named beneficiary.

Talking to loved ones and financial advisors inspires confidence

Adding to the lack of knowledge is that Canadians aren’t having open conversations about their preferences for what happens with their assets at the end of their lives. Communicating your estate plan to loved ones is important, yet four in ten Canadians (42%) aged 55+ are not talking openly about their long-term wishes and how they want their estate plan to be executed.

In fact, two in five (38%) aged 55+ say their financial affairs are private and they don’t feel comfortable discussing them with their loved ones, while one in five (21%) say that speaking with their family about it will cause infighting.

Furthermore, one-third (34%) say that their spouse/partner is not familiar with what’s in their estate plan, while half (51%) say their financial planner is not familiar, despite the knowledge and advice they could provide.

Yet — perhaps not surprisingly — having open conversations about how you want to preserve, manage and distribute assets reflects positively on Canadians’ feelings and confidence regarding retirement and leaving a legacy. Among those Canadians who have open conversations about their estate, 60% feel they will leave loved ones financially secure (versus 39% who do not), and 53% feel confident/comfortable in their ability to pass on a legacy (versus 29% who do not).

“Having an estate plan in place allows you to protect what’s most important to you and will help you to better manage your family’s financial future,” adds Soo. “It will also give you peace of mind that your wishes are in place and make the transition of your assets to your loved ones a quick and smooth process.”

About the RBC Insurance Study

These are some of the findings of an Ipsos poll conducted between March 21 to 24, 2023, on behalf of RBC Insurance. For this survey, a sample of 1,501 Canadians aged 18+ was interviewed online. This total sample included a boost sample of those aged 55+. Quotas and weighting were employed to ensure that the sample’s composition reflects that of the Canadian population according to census information. The precision of online polls is measured using a credibility interval. In this case, the results are considered accurate to within ± 2.9 percentage points, 19 times out of 20, of what the results would have been had all Canadians been surveyed. The credibility interval will be wider for subsets of the population.

About RBC Insurance

RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth and reinsurance advice and solutions, as well as creditor and business insurance services. RBC Insurance serves nearly 5 million clients globally, catering solutions uniquely for individuals, businesses and groups. Its brand is built on trust, strength, stability and continual success, and it has consistently been awarded strong credit ratings by A.M. Best and S&P Global. Its over 2,600 employees hold people at the heart of their service, continually striving to offer the best advice and care when their clients need it the most. For more information, please visit rbcinsurance.com. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value (subject to death benefit and maturity guarantees).

Media contact

Jana Lepp, Senior Manager, Corporate Communications, RBC Insurance, 416-348-2966

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Just like unexpected bills can throw plans off track, it’s hard to imagine what could happen if you or your partner were suddenly left to cover all of those costs alone. Life insurance can cost as little as $13 a month* but create a safety net for your children as they grow.

Life insurance is an important part of a larger discussion around family finances and ways to protect your family’s financial wellness and overall well-being. To buy life insurance, parents pay a monthly or annual cost (called a “premium”) for a set number of years (called a “term”), so loved ones can receive a lump sum of money when you pass away. How much money they receive depends on the plan you purchase — it could be anywhere from $25,000 to $25 million — but it can be enough to help your family bounce back, cover funeral costs, stay in their home, or go to university one day.

Understanding how life insurance impacts your family’s finances is the first step to putting them on the path to a more secure and stable financial future.

Why is life insurance important for parents?

Protecting your family’s future

You’d do anything to protect your family right now. What about when you’re not here? Life insurance can help you leave money for your partner and children, safeguard your family’s financial future, and try to ease any future burden on them — which can help ease your mind now. Signing up for a plan now means that you’re covered right now, and not relying on savings to build up over the long term.

The financial impact on a family if a parent passes away

Losing a parent early or unexpectedly can have a devastating impact on families. Without life insurance coverage or savings, your surviving partner and kids may find themselves unable to cover their costs at all. Some common challenges include:

  • Inability to make mortgage payments and having to move out of the family home.
  • Scrambling to cover unexpected bills, like final expenses including funeral expenses.
  • Inability to meet daily expenses, like monthly bills and car payments.
  • Unable to save for children’s education in the future, or having to cash out education funds to pay for other bills now.

Aside from covering costs, life insurance benefits can help give your family members a much-needed boost and help them achieve their dreams, like having enough money to attend the school of their choice, the funds to start their own business, have their dream wedding, or even travel.

How much life insurance do parents need?

There’s no magic number when it comes to how much life insurance coverage you need for your family. It may depend on your age, the ages of your kids, your phase of life, your family’s size, and your ongoing financial needs. When determining the amount of life insurance coverage you want for your family, it’s important to consider factors like:

  • How many dependents you have
  • If you’re the sole income or main provider
  • What your family’s debt load is
  • If your house has been paid off
  • Whether you have other investments that can cover costs for your family, such as a Registered Retirement Savings Plan (RRSP)
  • Personal goals like wanting to pay for your children’s educations or weddings in the future

As well, the more coverage you have, the higher the monthly premium payment is likely to be. If money is already tight, you may choose a coverage amount that has a lower monthly fee and meets your short-term needs.

Some other ways life insurance can help parents prepare for the unexpected include:

Paying off debts and final expenses

Many people don’t realize that some debts and loans, such as private student loans, aren’t forgiven when you pass away. Life insurance can help you cover those debts and protect your loved ones from taking on those costs after you’re gone. Not having to pay down loans and being able to pay out mortgages could lighten the load of their daily living expenses.

Covering funeral expenses and other end-of-life costs

Funerals and end-of-life expenses, such as legal fees and taxes, can cost thousands and can catch families by surprise. Life insurance can help cover these costs and help pay for the funeral you want.

Providing for your children’s education

School is expensive. It can cost many thousands to put kids — or multiple kids — through college and university. Life insurance can help ensure your family doesn’t have to make tough choices down the road. Both term life insurance and permanent life insurance death benefits can be used to cover education costs if you pass away. As well, some permanent life insurance plans have the option to cash out the money you’ve invested so far while you’re alive and help your kids out along the way.

Estate Planning

Life insurance can help reduce or even eliminate the government tax paid on your assets when they get transferred to your family, to ensure a smoother transition. Some permanent life insurance plans are tax-sheltered investment opportunities, which means you can add money and grow your investments along the way, knowing your family won’t have to pay taxes for receiving it.

Supporting a spouse or surviving partner

When a spouse or partner passes away, the surviving partner is suddenly responsible for all of the bills — the mortgage, the groceries, daycare and other bills can pile up quickly. Life insurance is one way to help keep taking care of your partner long-term, so they can keep living the lifestyle they’re used to. As well, some life insurance plans offer joint coverage options or options for insuring all family members.

Life insurance as a long-term investment

Life insurance can act as an investment vehicle. Depending on the specific plan, permanent life insurance may be a way to invest and grow your wealth while protecting your family’s financial future. Some choose it for its flexibility over other investment plans, like Registered Retirement Savings Plans (RRSPs) and Registered Education Savings Plans (RESPs) which have defined purposes (paying for retirement and education costs). You and your loved ones can use the money for whatever you want. It could also help your family with daily living expenses, purchasing a car, paying off debts, putting a down payment on a home, or taking the dream trip you always talked about — anything they choose.

 

Life insurance plans for as little as $13/month

Choosing the right life insurance policy for your family

The different types of life insurance policies available

Term life insurance: Term life insurance plans are an option for young families who prioritize affordability and short-term protection or are prioritizing paying off debts and paying into other plans, like an RESP. Term plans are more affordable than permanent plans in the short term and fees stay the same throughout, so you can predict your expenses. You pay a small amount over a set period of time (called a term), usually between 10 and 40 years, and are covered as long as you’re making those payments within that term. Coverage expires when your term runs out or you stop paying (however, there may be options to convert it to a permanent plan down the road).

Permanent life insurance: Permanent coverage is more expensive than term coverage upfront but it covers you for life, even when you’ve finished your payment term. There are several types of permanent life insurance plans, like Whole life insurance, Universal life insurance, and T100 life insurance.

Whole life insurance fees won’t change over time. You will still be insured for life, even when your payments end. Some people who like to take a “set it and forget it” approach to their finances and investments may choose this hands-off option.

Universal life insurance plans are more flexible types of permanent plans, allowing you to update your policy premiums and benefits in the future, so you can adapt to your changing life. Some people may choose this option because they love being hands-on with investments and enjoy managing investment risks for the possibility of more growth.

T100 life insurance, also known as Term 100 life insurance, is a simpler permanent plan. It offers lifetime coverage like other plans but without investment perks. You pay a set fee each month or year for the rest of your lifetime, or until you reach age 100.

How to choose a policy that meets your family’s needs

Choosing a life insurance plan now can help you set your family up for success later and protect your family’s financial future.

How much life insurance coverage does my family need?

There are many different factors that determine how much coverage you may need. Consider things like your annual salary, how long you want to cover your family, how many children or dependents you have, and how much debt you carry, like your mortgage balance.

Can I add beneficiaries later, like if I have more children?

Of course! You can change and add beneficiaries at any time, including dependents like children, grandchildren, parents, or partners over the years.

What is the best age for parents to buy life insurance?

There is no ideal age to buy life insurance. Parents may choose to buy plans before they have kids or wait until later in life. However, because older people tend to have more health issues, signing up for life insurance at a younger age can make it easier to qualify and help you if health issues arise in the future.

Can I insure individual members of my family?

Depending on your life insurance plan, you can insure yourself, sign up for joint coverage for you and your spouse, get coverage for future spouses, and even insure your children.

Are death benefits taxed?

A death benefit is the lump sum of money paid out to your loved ones or beneficiaries when you die. It’s tax-free, so your family can avoid being caught off guard by unexpected fees or deductions.

Can I receive money for a critical illness?

Death benefits are only paid out when you pass away, but some permanent life insurance plans have options to cash out the value you’ve paid into the plan while you’re still alive. This can be a way to help cover expenses of an unexpected critical illness, or another unexpected major cost.

Parents have different reasons for wanting life insurance at different life stages. A licensed insurance advisor can help you ask the right questions and develop a personalized plan that will ensure you make the right choice for you and your family.

Speak with an RBC Insurance Advisor by calling 1-888-925-0946 or Have an Advisor Call Me. Want to speak with an advisor in person? Find an Advisor or Store.

*Rate based on a $100,000, Term 10 policy for a male, age 37, non-smoker.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

1. Rate based on a $100,000, Term 10 policy for a male, age 37, non-smoker. This does not constitute advice. Please speak with a licensed insurance advisor for more information on what coverage is suitable for your needs. Subject to policy exclusions. Underwritten by RBC Life Insurance Company. The information within this site is not intended to provide tax advice. You should seek independent tax advice from a tax professional or advisor.

The improper use of fireworks can result in serious injury and damage to property. A safe way to enjoy the spectacle is to attend public fireworks shows handled by professionals. However, if you’re planning on doing your own fireworks this holiday, ensure you take some safety precautions that may help protect yourself, your audience and the surrounding area. 

Fireworks safety tips that may help prevent injuries and damage to property

Enjoy your fireworks display safely with these tips to help mitigate a potential accident:

  • Review the restrictions your province or municipality may have on where and when fireworks may be enjoyed. 

  • Purchase consumer-grade fireworks from a licensed retailer and be cautious when purchasing from roadside “pop-up” retailers. It’s not recommended to purchase fireworks from individuals who may have obtained their fireworks from an unlicensed vendor, as fireworks safety conditions from unlicensed sellers cannot be determined or assessed.

  • Always store fireworks out of children’s reach and in a safe place away from any flammable material. Fireworks should also be kept away from property, such as cars or buildings, as well as away from dry grass and hazardous conditions.

  • Ensure there is a bucket of water, hose, or fire extinguisher nearby to extinguish any flames that may occur as a result of the fireworks. Be sure that any fire extinguisher has been inspected, is functional, and has not expired. 

  • Avoid the use of drugs or alcohol including smoking and wear safety glasses and keep your hands protected when lighting fireworks. 

  • Set fireworks off in an open space away from buildings, homes, dry fields, wooded areas or parks, while adhering to the manufacturer’s instructions and recommendations to ensure the safety of anyone nearby. 

  • Use a sturdy firing base such as a fire-resistant pail with sand/earth, or another non-flammable surface. Never light a firework while it is in your hand. It’s also recommended that you ignite your fireworks behind a sturdy, non-flammable barrier to contain the blast and to shield onlookers from sparks or flames from tipped-over fireworks.

  • Anyone who is not igniting fireworks should stand a minimum of twenty-five feet away, while maintaining awareness in case of misfire, flying sparks, or if the firework tips over. Keep a first-aid kit handy in case of medical emergencies.

  • Never attempt to reignite fireworks – even if they haven’t gone off. Wait several minutes before approaching fireworks that have failed to go off. Douse the failed firework with water and dispose of it properly and immediately.

  • Immerse fireworks in water or sand before disposing to ensure that any burning material is completely extinguished and cannot ignite and cause damage.

More fireworks safety tips can be found on Natural Resources Canada and the Canada Safety Council.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

While an accident can be overwhelming, it’s important to know how to protect yourself in the aftermath because post-accident scams are on the rise. Being aware of this type of fraud is the first step in protecting yourself against them. 

But what does a post-accident scam look like?

It could mean getting towed to a repair shop that holds your car hostage until you pay an outrageous fee or even transfer ownership. In such an instance, fraudsters will intentionally cause an accident, and then demand that the vehicle be taken to a particular repair shop. They do so because it means the auto repair business is able to invoice all the repair work to a victim’s insurer. If you feel like this is about to occur, be sure to call your insurance provider to let them know what happened and how to proceed, including steps to arrange for tow truck service (if needed).

In some auto collision frauds, perpetrators may even claim for non-existent injuries after a collision. In short, if there is a way to get financial gain from a car accident where a fraudster looks like a victim, they will try to do so. That’s why it is so crucial to be vigilant to this type of crime and to know how to avoid insurance fraud. If at the scene of the accident, someone claims to be experiencing an injury be sure to call both the police and an ambulance right away for assistance. If the injury is real, then it’s best to have properly trained medical staff on hand, but if it’s part of an insurance scam, then having law enforcement at the scene of the accident can act as a deterrent to the fraudsters perpetuating their scam. 

Insurers have seen customers fall victim to these fraudulent scams. Fortunately, these steps may help you avoid potential post-accident fraud:

  1. Call your insurance provider right away once everyone’s safe. They’ll help you through the claims process smoothly.

  2. Record details of the accident. Note the vehicles involved and the people or companies you interact with.

  3. Don’t sign any blank forms or anything you don’t understand. Take time to read the fine print and ask questions.

  4. Reach out to your insurer to discuss what options are available for repair shops and rental cars.

  5. Finally, if you have suspicions of fraud, report it to your insurer.

By keeping to these steps, you may help keep yourself and your loved ones well-informed and protected against post-collision insurance scams. 

Car accidents can be high-stress situations, but it’s still important to keep a level head during the post-collision process, so you can know when someone may be trying to pull a fast one on you. And remember, if you ever feel uncomfortable during your interactions with the other driver, you can always call the police to act as a neutral third party. Often, just their presence alone will be enough to deter any would be insurance scam artists. 

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

This is why it is important to always be prepared. Part of being prepared involves having an emergency kit.

Having an emergency kit in your car can be very helpful when you are in a bind. While some people overlook the importance of emergency kits because they rely on road side assistance, the reality is that you never know how long it will take for help to arrive. 

What items should you include in your emergency kit?

While there is no limit to what items you can include in your emergency kit, there are a number of items that you may need to have. These items include:

  • A cell phone (if you don’t carry one with you)

  • First aid kit

  • Bottled water and snacks

  • A blanket, gloves, and additional warm clothing for the winter months

  • Flashlight and batteries

  • Tire gauge and Jumper cables

  • Small tool kit

Your emergency kit should have these items at a minimum, and depending on your specific situation, you may include other items. These additional items will be based on your driving frequency and the climate where you drive.

Regardless of how often and where you drive, having an emergency kit is common sense. If you don’t have one already, investing in one is not only important, it could be a lifesaver.  This article is for general informational purposes only.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.