Life insurance

There are two main types. Term life insurance covers you for a set period, such as 10, 20 or 30 years. Permanent life insurance covers you for life, and comes in three main kinds: participating whole life and universal life, which build cash value, and term to 100, which doesn’t.

Add up what your family would need if you died: your debts, including the mortgage, the support they’d need until your children are independent, future costs such as education, and final expenses. Then subtract what you already have, such as savings and workplace life insurance, and any income your family would still receive. The difference is the coverage to aim for. The term life insurance page works through an example.

Not for a policy you own personally: the premiums are a personal expense. A business can deduct premiums only in limited cases, for example when a policy is assigned as collateral for a business loan from a bank or other qualifying lender, and even then usually only part of the premium. Speak with us or your accountant about your situation. See also What are the tax implications of business-owned life insurance?

Often, yes. The insurer looks at the condition, how well it’s managed and how recently you’ve been treated, then offers coverage at standard rates, offers it at a higher premium, postpones a decision or declines. If you can’t get coverage that way, guaranteed issue life insurance asks no health questions, but it offers smaller amounts at a higher cost, and usually pays the full benefit for a death from illness only after a waiting period.

Your premium is based on your age when the policy starts: the older you are, the higher it is, because the chance of dying during the coverage rises with age. On term insurance, the premium then stays the same for the term and goes up if you renew. On most permanent insurance, it stays the same for as long as you pay.

Yes. A secondary, or contingent, beneficiary receives the death benefit if your primary beneficiary dies before you or can’t receive it. You can name more than one beneficiary at each level and set each person’s share. To add one, you send the insurer a signed beneficiary change, unless your current beneficiary is irrevocable, in which case you’ll need their consent too.