A New Immigrant’s Guide on Choosing a Life Insurance Policy in Canada

A New Immigrant’s Guide on Choosing a Life Insurance Policy in Canada

Canada’s healthcare is publicly funded. Taxpayers share health and medical expenses. If an eligible user requires healthcare and hospital services in the country covered by the general public medical insurance, they don’t need to pay for them. Canadian citizens and immigrants who qualify as permanent residents often are the ones who have access to a single-payer, universal healthcare system or Canada’s Medicare.

Once new immigrants land in Canada, they mostly need to wait for six months to apply for Canada’s Medicare. That is why new immigrants in Canada including expatriates and non-residents who are not yet eligible for local plans can consider getting medical treatment and healthcare insurance coverage from private insurance providers in Canada such as GeoBlue Xplorer, Aetna International, and Cigna Global.

However, aside from the basic health insurance one can avail in Canada, this article focuses on the other types of insurance such as extended health and life insurance that new immigrants can purchase or get through their employment that the government doesn’t cover.

To help you choose the extended insurance that suits you best, we have compiled different insurance options, including coverages, pricing beneficiaries, and other information.

Types of Life Insurances:

Term Life Insurance

Based on the word itself, term life insurance lasts for a certain time, usually 10 to 20 years of coverage. Meaning, this insurance does not require a lifelong commitment, and you can pay for it for the duration of time you’ll need it. Because this insurance is temporary, your other money can be used for paying bills, house mortgage, family’s needs, and business needs.

This life insurance is perfect for individuals and immigrants who are just starting to provide extended insurance for themselves and their families.

The average cost of a term life insurance based on a $500,000, 20-year term life insurance policy range from $186 to $9,298 depending on your gender and age.

Permanent Life Insurance

Permanent life insurance or participating life insurance provides a user with lifelong insurance coverage and the opportunity for tax-preferred cash value growth as long as you are paying your premiums. This insurance policy also allows eligible users to receive dividend payments which they can use to purchase additional insurance coverage or earn discounts from annual premiums. Another option is to leave these dividend payments on deposit to make interest or take them in cash. Note that the dividends you earn depend on the performance of your account.

This type of investment is ideal for individuals and families looking for lifetime protection with the potential of earning significant savings. This is also a great way to save for their retirement. In the instance that the policy owner dies, their chosen individual will receive a tax-free payment.

The average cost of permanent life insurance based on a $500,000 policy ranges from $3,802 to $$27,137. The actual price may depend on your age and gender.

Universal Life Insurance

Universal life insurance is flexible life insurance that combines savings and protection. Individuals who have this type of insurance are assured that their beneficiaries will receive the benefits of this insurance should the owner die. If your payment is above the cost of the insurance, you earn tax-preferred interest.

This type of insurance is perfect for parents who want to leave more money for their children and grandchildren and for business owners who are finding a tax-efficient way to protect the value of their business.

*Note: The current dividend scale interest rate for Canada’s life insurance from July 1, 2021, to June 30, 2022, will decrease from 6.2% to 6.05% as approved by The Equitable Life Insurance Company of Canada Board of Directors.

Some Types of Extended Health Insurances:

Extended Health Care Insurance

This type of insurance policy allows individuals to have coverage on prescription drugs, including high-cost drugs. They are also covered for paramedic services and practitioners such as massage services provided by a chiropractor, physiotherapist, or acupuncturist.

Other inclusions in extended health care insurance are emergency dental services, hospital accommodations, nursing and home care, out-of-the-country travel insurance, and vision care.

This type of insurance is best for retiring individuals, those who need to replace their previous insurance coverage, and self-employed individuals who are not eligible for group benefits.

Accidental death, dismemberment, and specific loss insurance

This type of insurance policy is often added as a rider to an individual’s health insurance or life insurance policy. This covers the unintentional death, dismemberment, or the loss of use of the insured individual’s body parts. This supplement health insurance does not replace life insurance.

This type of insurance is best for individuals whose jobs involve different risky activities.

These are just some of the insurance options new immigrants to Canada can consider getting to ensure their safety and better future. To choose which type of insurance to get for you and your family, it is best to examine your needs, age, lifestyle, employment, and financial capabilities.

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