Murray Callaghan, Callaghan Wealth Management
I received mine today in the mail.
Term is still the best and most affordable option to gain the highest coverage where a loss of income would have significant impact on dependants.
Term refers to the length of time that premiums remain constant. Standard terms are 10, 20 and more recently, 30 years. The longer the term the higher the initial premiums but the most cost-effective over the longer term.
My options? Renew (no action required but premium quintuples – ouch!). Convert to a permanent policy such as whole or universal life (not this time). Cancel (but I still want/need coverage). Replace (seek a new policy at a lower rate and when it comes into effect cancel the old policy). I choose to replace.
What are the drawbacks? I’m older and statistically my risk premium is higher so the cost I was paying is going to increase regardless. My health seems good but being older means more chance of hurdles. There is also the reinstatement of the incontestability (I forgot to disclose a material fact) and suicide clauses for the first two years.
Ultimately, I choose to ladder by applying for a larger Term 10 policy and a smaller Term 20 policy. In addition, being self-employed it’s also prudent to have Critical Illness (my choice) or Disability in place.
Electronic applications make the process quicker but I will need to do a health questionnaire over the phone. A nurse will come to take my vitals, blood and urine. An Attending Physician’s Statement might be required so I’ll book an appointment as this can delay the process.
Exploring your options to save is always your best move.
Murray Callaghan is a Certified Financial Planner with 15 years’ industry experience. He partners with external portfolio managers and insurance providers. Reach him at 250.286.9968 or visit his website at www.crwealthmanagement.ca.