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How to Protect Your Home for Winter

Ever notice how things go south at the most inconvenient times? Welcome to winter. Missed out on cleaning the gutters? Brace yourself for some potential ice-induced drama. And those breezy windows and doors? They’re practically inviting your heating bill to skyrocket.

Similar to maintaining a trusty vehicle, a winter home requires seasonal upkeep. Furnaces demand a check, chimneys cry out for a clean, and gaps in windows beg for sealing. When getting ready for winter year after year, these tasks transform from burdens to dependable rituals.

Key takeaways

  • Your home requires seasonal upkeep to protect it from the elements.

  • Do both an indoor and an outdoor inspection to ensure your home is ready for winter.

  • Your home is one of your most important assets, so consider going beyond seasonal inspections and safeguard it with the right type of insurance.

    How to prepare your home outside for winter

    Here are some ways to make sure the outside of your home and its surrounding property is ready for the colder months.

    Inspect the roof

    Missing a shingle or two? Spot-check your roof, especially after those gusty autumn days, because missing and damaged shingles can cause leaks. Consider a professional once-over for a more thorough examination. If you’ve got critters eyeing your roof as their winter home, maybe it’s time to get professional intervention. You definitely don’t want uninvited guests over the holidays.

    Clean the gutters

    Debris-free gutters aren’t just an esthetic choice; they’re also your home’s first defence against water damage. Ensure those downspouts usher away water, protecting your home’s foundation.

    Insulate all your windows and doors

    Feel a draft? Seal those gaps and consider installing weatherstripping. And assess the overall health of your window frames. They play a bigger role than just looking pretty by preventing drafts and leaks, and keeping things energy efficient.

    Clean your landscaping and prep irrigation systems

    Prep your garden for its winter slumber. Prune trees to keep stray and damaged branches away from your home, stash your gardening tool kit to keep it in working order, and winterize those irrigation systems.

    Drain your spigot and pipes

    Unhooking and properly draining water from hoses is essential to prevent freezing and subsequent damage to spigots and pipes. Avoid expensive repairs by ensuring all water is removed from hoses after each use, safeguarding your plumbing system against potential freezing-related issues.

    Inspect your walls and siding

    A quick evaluation of these can make a world of difference. Boost your home’s warmth quotient by insulating walls and the attic. You may also want to touch up paint, where needed, adding a fresh, winter-ready look.

    Inspect your driveway and walkways

    Address those cracks to keep things level and set up proper drainage, so water doesn’t pool, leaving your walkways as skating rinks. Ice is great in a glass of eggnog, but not on your driveway.

    Get the necessary tools and products

    When winter arrives, it’s essential to be prepared with the necessary tools and products to tackle the challenges it brings. A sturdy snow shovel takes centre stage, ensuring efficient snow removal from driveways and walkways. For larger areas, a snow blower can be a valuable investment, quickly clearing snow with ease. Insulated and waterproof gloves protect your hands from the cold and moisture while you’re shovelling or handling icy surfaces. Bolster traction on icy surfaces with salt, a winter warrior against slippery pathways. Additionally, keep a stash of sand to enhance traction and prevent slips.

    How to prepare your home inside for winter

    The inside of your home needs some TLC before winter, too. Read on for some ways you can ensure things will be cozy and safe in time for the first snowfall.

    Inspect your attic

    Exposed joists can be energy drainers. A little foam or fibrefill insulation might do the trick.

    Check your basement foundation

    A little crack can snowball into a major issue. Insulate exposed pipes, so they don’t freeze, and address gaps around exposed ductwork to keep out drafts.

    Examine your furnace or boiler

    An outage on a cold night? A malfunction—or worse—a boiler leak or rupture? No thanks! Hire an expert to check that everything is running smoothly and remember to replace those filters.

    Check your sump pump

    If you have one, now’s the time for that once-a-year check to ensure everything is running smoothly and to help prevent flooding. It’s better to be safe than soggy.

    Inspect your chimney and fireplace

    A professional cleaning of these enviable features could help you have safe and heartwarming fires all season long.

    Consider a programmable thermostat

    This is a smart way to keep your home toasty and running efficiently, allowing you to set specific temperatures for specific times (such as lowering it while you’re sleeping, for example) and adjust the temp while you’re away from home.

    Replace the batteries in your smoke detectors

    This is definitely not something you want to leave off the list. Make sure the batteries in your smoke detector are fresh.

    Remember, the goal here isn’t just to winterize your home; it’s about creating a cozy and safe winter home. And while you’re at it, home maintenance tips go beyond just physical checks. It’s the satisfaction that comes with knowing you’ve covered all your bases. Your home is one of your most important assets, and safeguarding this haven with insurance is smart, too. Reach out to RBC Insurance at 1-877-749-7224 for comprehensive home insurance coverage.

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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.

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Also, recovery rates for stolen cars are going down. In 1990, 90 per cent of car owners who reported their vehicles stolen in Ontario had them recovered by police. That rate of recovery has fallen to approximately 50 per cent, in part because cars are being shipped outside of the country by organized crime rings.

Vehicle theft results in increased costs that affect us all. As car theft increases, so does the cost of car insurance—not just for those who’ve had their cars stolen but for all car owners. Car theft costs Canadians $1 billion each year in financial losses.

Key takeaways

  • Car theft rates have risen dramatically in recent years in Canada.

  • Cars with push-button starters and keyless entry are more susceptible to theft.

  • To keep your car safe at home, park in a garage or secure parking lot.

  • Devices like steering-wheel locks, anti-theft recovery systems, and on-board diagnostic (OBD) data-port blockers can help deter thieves and increase the chances that your car will be recovered.

Car theft prevention measures to take at home

Keeping a car secure while it’s parked at home is something that drivers often overlook. Here are some steps you can take to deter thieves from stealing your car out of your driveway.

Protect your key fob to prevent relay and reprogramming theft

Keyless-entry and push-start vehicles offer convenience for drivers while giving criminals additional options for stealing cars. Relay theft (also known as reprogramming theft) is when thieves use high-tech means to steal your vehicle. Your key fob is vulnerable to radio-frequency devices that can intercept the signal it emits and use that to enter your car. To keep this from happening, store your fob far away from the entrance of your home or keep it in a signal-shielding Faraday box or pouch. These are inexpensive and can be easily purchased online. 

Park in a garage or secure area

The best and safest place to park your car is in a garage or secure parking lot. If you don’t have access to one, there are still a few tactics you can use to make your car less likely to get stolen from your home.

  1. Never leave your car running,even if you’re just popping back into the house to retrieve a forgotten item. Turn off the engine and take your keys with you, leaving doors locked and windows closed.

  2. If you park on the street, turn your wheels in the direction of the curb. This will make it more difficult for your car to be illegally towed. For the same reason, back rear-wheel-drive cars into the driveway and park front-wheel-drive vehicles facing the top of the driveway.  

Lock vehicle doors and windows

Simple steps go a long way toward preventing car theft at home. Always lock your car, keep your windows rolled up, and store items that might further attract thieves out of view and locked inside the trunk.

More car theft prevention tips

You’ll never regret going the extra mile to protect your vehicle from theft. Here are a few items you can use to deter car theft.

Car anti-theft devices

Inexpensive steering-wheel locks act as a visual and physical deterrent that will stop some thieves from targeting your car.

OBD data-port blockers

A data-port blocker or lock prevents thieves from gaining access to your car’s on-board diagnostic (OBD) system, which is what they use to access and control a car’s internal computer, in turn, start the ignition. Check with your car manufacturer to make sure that installing this device does not invalidate your warranty, and do some careful product research before choosing a lock.  

Install an anti-theft recovery system

Anti-theft recovery systems are designed to prevent theft and aid in the recovery of stolen vehicles. Most recovery systems work by hiding small tracking devices throughout the vehicle and provides real-time location updates, enabling law enforcement to track down and recover a stolen car anywhere in North America. Some systems, like Tag, may also etch their logo on the car’s windows to serve as a deterrent for thieves.  Installing an approved anti-theft recovery system may also qualify you for insurance premium discounts! Consult with your insurance advisor for more information on available anti-theft recovery options suitable for your needs and region, and potential discounts.

What to do if your car is stolen

If your car is stolen, contact the police to file a report. Don’t try to retrieve it on your own, even if you have a tracking device installed. Provide police with all the data you have, including video-surveillance footage and GPS information. Be sure to keep copies for yourself of any documents you share with police. Ask the police for a copy of their report for your own files and insurance claim.

Next, contact your insurance company to learn how to file your claim. They’ll guide you through the process and let you know the exact information they need.

Do you want to learn more about car insurance and how to protect your car? Speak with an RBC Insurance Advisor by calling 1-877-749-7224 or get a quote online today.

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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.

Canada is a big country, and drivers from coast to coast to coast head out on the roads in all kinds of weather. Conditions can vary widely in winter, depending on where you live and where you’re heading. From heavy rains to sleet, snow, and ice storms, Canadian drivers need to make sure they’re safe on the road—and the right tires go a long way to support safer driving.

All-season tires are designed to safely grip the road’s surface in most conditions, but that changes when temperatures drop below freezing. Winter tires (or snow tires) are specially engineered to remain flexible in freezing temperatures and maintain their grip on the road. Here are some things to consider when choosing the right tires for your car.

Key takeaways

  • The differences between winter tires and all-season tires come down to tread design and the flexibility of the rubber they’re made from.

  • Winter tires offer better traction and an increased ability to grip the road in sub-zero temperatures.

  • All-season tires offer versatility and convenience for people who don’t drive in harsh winter weather.

  • Four-wheel drive is not a substitute for winter tires, because it doesn’t offer the grip and traction that snow tires offer.

What are the differences between all-season and winter tires?

Some of the key differences between winter tires and all-season tires include:

  • All-season tires aren’t designed for temperatures consistently below +7 C degrees Celsius. Their treads can become inflexible in cold conditions and then reduce their grip on the road. Winter tires are engineered to remain flexible and continue to grip the road in very low temperatures.

  • All-season tires are versatile and great for driving in a variety of conditions when temperatures are above freezing. They offer a smoother ride, thanks to their finer tread.

  • Winter tires may help you save on auto insurance, owing to their proven record of better vehicle control and traction.

  • All-season tires are engineered to have a longer lifespan than winter tires, since they’re more versatile and used more frequently.

What are the benefits of winter tires?

They offer better traction

Thanks to design elements dedicated to improving traction on ice and snow, winter tires make driving in winter weather a safer, less stressful experience. These tires feature a tread pattern with deeper grooves and diagonal slits laid out in zigzagging patterns. Together, these slits, called “sipes,” and the tread’s deep grooves give your car more traction on slippery surfaces. Additionally, the rubber that’s used to make winter tires is softer, so it stays flexible and retains its grip on the road in cold weather.

They have optimal cold-weather performance

It’s that softer, more flexible rubber combined with the special tread design that give winter tires their increased capabilities to provide traction on icy  or snowy roads when the temperature dips below freezing. All-season tires tend to become more solid, less flexible, and less able to grip the road in cold winter weather.

They last longer

Swapping out your tires seasonally means that each set will last longer, especially since they’re only being used in the road conditions they’re designed for.

They can come with auto insurance savings

Drivers in Ontario and Alberta can benefit from saving on their insurance when they have winter tires installed. Contact your insurance advisor to learn more about how to qualify for the winter tire discount. In Quebec, the mandatory use of winter tires has been shown to reduce the average number of collisions occurring during the winter months by 19 per cent. Reducing your risk on the road reduces the chances of having to make an insurance claim, therefore saving you from having to pay your deductible and potential future increases in your insurance price.

Winter tire trade-offs

Winter tires are usually more expensive than all-season tires and come with the additional cost of having them changed each year, as the seasons change. Driving on winter tires during warm weather will wear down the soft rubber compound these specialized tires are made from. Winter tires are truly made for winter, and outside of cold, icy, or snowy conditions, they actually offer less responsive handling.

What are the benefits of all-season tires?

They have optimal tread design

If you live in an area of the country that doesn’t experience the extreme winter weather conditions that the rest of Canada does, all-season tires could be your best choice. These tires are engineered for a range of road conditions—from wet to dry to a light dusting of snow. Their treads feature a blend of summer and winter tire design, with winter tire sipes in the centre for travelling through light snow or slush, and wide grooves to help water pass through in rainy conditions. The outside edges look like summer tires and are designed for gripping dry roads while cornering.

They’re suitable for moderate climates

The design of all-season tires makes them a great choice for those who live somewhere with mild winters. They perform well in a wide range of temperatures and road conditions, with the exception of extreme cold and ice.

They’re versatile and convenient

These smooth-riding tires come with the benefit of convenience: there’s no twice-yearly change required, no need to find storage space for the tires that aren’t in use, and there are none of the costs that come with the above. They’re versatile enough to handle many kinds of road conditions safely and effectively.

They can be budget friendly

Drivers may find that using all-season tires is cheaper in terms of both the initial cost and the maintenance.

All-season tire trade-offs

The convenience of keeping one set of tires on your car year-round comes with some trade-offs. In snowy and icy weather, all-season tires simply don’t perform as well as winter tires (they also don’t perform as well as summer tires in hot weather). They don’t last as long as winter tires and they also don’t offer the possibility of a discount on auto insurance.

Are winter tires mandatory in Canada?

Many drivers believe that because their car has four-wheel drive, they don’t need winter tires for winter weather. This isn’t true. Four-wheel drive gives your vehicle the power to pull you out of a snowy ditch after you’ve slid into it. Winter tires grip the icy road and can prevent you from finding yourself in a ditch in the first place.

Winter tires are not mandatory in Canada, with the exception of in Quebec (from Dec. 1 to March 15) and in British Columbia on specific routes marked with regulatory signs (from Oct. 1 to April 30); however, they are highly recommended.

When choosing winter tires, look for the official Alpine/Three-Peak Mountain Snowflake Symbol (three mountain peaks with a snowflake), which designates them as being approved under Canadian National Safety Code.

Choosing between winter tires and all-season tires

Deciding which tires work best for you depends on where you live, how often you drive, and your preferences about the way your car performs at different times of the year.

If you’re familiar with the harsh winters experienced in many parts of Canada and safety is your No. 1 concern, winter tires are your best choice. They’ll support your vehicle’s peak performance in icy, snowy, and cold weather, thanks to their increased traction and ability to grip slippery surfaces.

If the climate you live in features milder winters, all-season tires might best serve your driving needs. They’re more versatile and a good compromise for a wide range of driving conditions.

Contact your RBC Insurance Advisor to learn about the potential insurance savings for having winter tires installed on your vehicle by calling 1-877-749-7224 or get a quote online today.

Get Your Free Car Insurance Quote

Take a few minutes to get a competitive auto insurance quote online

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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.

As hard as it might be to talk about, estate planning is important if you want the satisfaction of knowing that your future and that of your family are taken care of.

Estate planning is when you create legal documents that lay out your instructions so your friends and family can follow your wishes in the event you’re unable to make decisions for yourself or upon your death. It can prevent family conflict from brewing and ensure your property, money, and treasured items are distributed exactly how you wish.

Your estate is one of your greatest legacies to your loved ones, after all. Estate planning allows you to protect the wealth you’ve accumulated over your lifetime while helping you better secure your family’s financial future.

Key Takeaways:

  • Everyone should consider will and estate planning, whether they’re a young adult just starting their career or a retiree.

  • Creating an estate plan can help preserve your hard-earned wealth and ensure your wishes will be carried out after you’ve died.

  • Estate planning could help your beneficiaries avoid taxes, delays, and out-of-pocket costs.

  • By defining how you want your assets to be distributed, you can prevent future disputes or conflicts among your loved ones.

  • Enlist a team of qualified professionals to support you in navigating the complexities of planning your estate.

Who should consider estate planning?

No matter how old you are or how much money you have, you should consider estate planning. Talking about your financial assets and future wishes can feel awkward, but addressing these issues now can help you feel more confident about your future and ultimately the legacy you’ll leave to your loved ones.

Why is estate planning important?

First, estate planning makes sure your hard-earned money goes to the people and causes you care about. Second, having a plan can also ensure the taxes on your estate are properly managed so your family or named beneficiaries get their assets faster and via a less stressful process. Third, it ensures your wishes—from the plan for a dependant to your funeral arrangements—are followed.

Who can help you plan your estate?

Estate planning involves details specific to your financial situation, so you’ll want to meet with the right professionals to help you figure it all out. You can enlist a will and estate planner, a lawyer, and an accountant to help you create the suite of documents you need.

3 benefits of estate planning?

You’ve probably heard nightmarish stories about estates getting held up in court for years or family dramas that ensued after the funeral. That’s the last thing you want your loved ones to deal with when you pass away. By planning your estate, you’re helping to:

1. Preserve your capital

If you’re able to protect your estate from additional taxes, more of your assets can end up where you want them—with your named beneficiaries or donated to causes you care about. Estate planning can help make sure your assets are not held up in the settlement process or affected by fees that your family may have to pay out-of-pocket to settle once you’re gone.

2. Bypass probate

You don’t want your estate to get stuck in limbo in the court system during the probate process. You can work with your estate-planning team to structure your assets in a tax-efficient way. Certain assets in your estate, such as segregated funds, may be able to bypass probate (the process by which a court formally approves a will as the valid and last testament of the deceased person) so your beneficiaries can get their payout faster and decrease or avoid the cost of probate fees and taxes.

3. Protect relationships

Nobody wants the settlement of their estate to cause fighting among their loved ones or their family’s financial matters to be made public. By having segregated funds as part of your portfolio, you may be able to keep your named beneficiaries and your estate information more of a private matter and make sure the proceeds are paid quickly and directly to your chosen beneficiaries. Structuring your wealth distribution—by, for example, putting some money in a trust, delaying the transfer of wealth, or providing a gradual payout over time—can also help ensure that beneficiaries receive a more enduring inheritance.

What you should consider when planning your estate

People typically think estate planning only involves creating or updating their will. While a will— the guiding legal document in the administration of an estate—is critical, there are lots of other components to consider.

First, you need to decide which professionals you want to work with to create your estate plan, and then you have to create a list of your assets before you decide how you’d like them to be distributed when you’re gone. Here are a few things you’ll want to do first.

Gather important documents and information and keep them in a centralized file

Begin organizing your documents to make assessing your wealth, assets, and debt easier and faster. You’ll need the following to get started:

  • Birth certificate

  • Marriage certificate(s)

  • Social insurance number

  • Real estate deeds

  • Will and powers of attorney for property and personal care

  • Safety deposit box information

  • Contact information for your executors and named beneficiaries (called an estate trustee in Ontario and a liquidator in Quebec), advisors, lawyers, and accountants

Prepare or re-evaluate your wills

There are many reasons to write or update your will, but for most people it usually involves some kind of life change. If you have a child or dependants, get married, buy property, or experience a health scare, it might be time to think about what you want for the future.

Take the time to prepare, review, or update your will(s) to ensure it reflects your current wishes. When you update your will, you should also consider appointing powers of attorney (both for personal care and property). A power of attorney is someone you choose to take over your personal affairs if you become unable to manage your estate or personal care. You will also need to consider who will manage and settle your estate after you pass away.

What should you consider when choosing an executor(s)?

Choosing an executor is a big decision and the role is a huge responsibility to put on a loved one. Your executor is in charge of settling your estate according to your wishes once you’re deceased, and the sheer volume of legal, tax, and administrative tasks can be overwhelming. Consider that some complex estates can take years to settle and there can be more than 70 individual tasks involved.

Before you choose an executor, there are a few things to think about:

  • Consider your family dynamic when choosing a spouse, child, or sibling. Many of the tasks will have to take place while the executor is still grieving.

  • Consider the age and health of your executor and whether they’re likely to survive you.

  • Choose someone who is able to handle complex tax, legal, and administrative tasks and has the time to put in the work over what could be a few months or longer.

  • Ask your executor before naming them in your will to ensure they are willing and able to help you manage your estate.

  • Keep in mind that you can also choose a trust company, a lawyer, or an accountant to be your executor if you don’t want to burden your loved ones with a complex task.

Make an inventory of your family’s assets and liabilities

Before you can decide where your assets (and liabilities, like debts) will go when you die, you need to know what you have.

Create a thorough list of your assets:

  • List your physical assets, like real estate, personal property (like jewelry and art), insurance policies, bank accounts, investments, and pensions.

  • Assess the ownership structure of your assets and what the taxable or legal impact may be of joint versus individually owned.

Make a list of your liabilities:

  • This includes debts such as mortgages, credit card debt, personal loans, and unpaid taxes.

Assess your financial preparations

Now that you’ve looked through your assets and liabilities, it’s time to consider where you’re at.

  • Review your pension(s) and investments to ensure they meet your financial goals.

  • Consider your insurance coverage (from life to property) to ensure the amount and type of insurance will cover final expenses and any ongoing needs of your family.

  • You can even arrange a prepaid funeral—if you can wrap your head around it. Not only does it alleviate some immediate stress after your death, it can also reduce the financial burden of funeral costs.

Review your beneficiary designations

You can choose to name your beneficiaries either as revocable or irrevocable. Revocable means you can change the named beneficiary at any time. Most insurance policies use revocable beneficiaries.

Irrevocable means you need the consent of the named beneficiaries to make the change after they’ve been written into your will or designated on an insurance or segregated fund policy. An irrevocable beneficiary is more ironclad.

Estate planning doesn’t have to be a big, scary undertaking. The process can actually help you feel more secure about the future and give you comfort that you’re continuing to help support your family and loved ones after you’re gone.

Speak with an advisor today to learn more about how RBC Insurance can help be a part of your estate planning to protect your financial future and those of your loved ones.

RBC Retirement Investment Solutions

Whether you’re building up your nest egg or ready to turn your hard-earned savings into retirement income, our solutions can help you make the most of your money. Have an RBC Insurance Advisor call you to learn more.

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.

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. RBC Guaranteed Investment Funds are individual variable annuity contracts and are referred to as segregated funds. RBC Life Insurance Company is the sole issuer and guarantor of the guarantee provisions contained in these contracts. The underlying mutual funds and portfolios available in these contracts are managed by RBC Global Asset Management Inc. When clients deposit money in an RBC Guaranteed Investment Funds contract, they are not buying units of the mutual fund or portfolio managed by RBC Global Asset Management Inc. and therefore do not possess any of the rights and privileges of the unitholders of such funds. Details of the applicable Contract are contained in the RBC GIF Information Folder and Contract at www.rbcinsurance.com/gif.

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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.

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.

*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.

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.

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.

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

*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.

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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.

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.

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

*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.