Navigating Life Insurance in Alberta: Answers to Common Questions and an Easy Buying Guide
- patrick83738
- Sep 15
- 5 min read
Updated: Oct 1
Picture this: you're at home, enjoying a peaceful evening with your family. Suddenly, a message pops up from a friend celebrating their new baby. As you share in their joy, a thought crosses your mind: “What if something happened to me? Would my family be okay?” This realization is a common trigger that prompts many to consider life insurance.
Life insurance may seem complicated, especially if you're unsure where to begin. However, you’re not alone. In this guide, we’ll answer frequently asked questions about life insurance in Alberta, break down the buying process into clear steps, and reassure you that getting a policy can be straightforward.
Common Questions About Life Insurance
What is Life Insurance?
Life insurance is a contract between you and an insurance company. You pay a premium, and in exchange, the company promises to pay a lump sum to your beneficiaries upon your death. This money can help cover crucial expenses, such as:
Mortgage payments
Education costs
Daily living expenses
For example, if the primary breadwinner passes away with a $500,000 policy, the family can use that money to maintain their standard of living and handle financial obligations.
Why Do I Need Life Insurance?
Life insurance is vital for families. If you're the main earner, your family counts on your income. A study showed that 41% of Canadian households would struggle to pay bills within six months if the primary earner died. Life insurance can provide essential financial support during such a challenging period. It helps protect your family’s lifestyle and ensures they can meet their financial commitments.
How Much Life Insurance Do I Need?
Determining your life insurance needs depends on various factors, including income, debts, and the number of dependents. A common guideline suggests having coverage worth 10 to 15 times your annual income. For example, if you earn $70,000 annually, aim for a policy between $700,000 and $1.05 million. However, a personalized assessment, possibly with a financial advisor, is always advisable to suit your unique situation.
What Types of Life Insurance Are Available?
In Alberta, the two primary types of life insurance are term life insurance and whole life insurance.
Term Life Insurance: This policy offers coverage for a specific period, usually between 10 to 30 years. This option is generally more affordable. For instance, a 30-year-old could secure a $500,000 term life insurance policy for around $30 to $40 per month. It’s great for families looking for coverage while their children grow up.
Whole Life Insurance: This type of policy covers you for your entire life and includes a savings component that builds cash value over time. While it is typically more expensive—often twice as much as term insurance—it can serve as a long-term financial planning tool, accumulating cash value that you can borrow against later.
The Buying Process: Step-by-Step
Now that you understand the basics of life insurance, let’s break down the buying process into easy steps.
Step 1: Assess Your Needs (less than an hour)
Evaluate your financial situation and decide how much coverage you require. There are several online tools to help you calculate how much life insurance you will need. An advisor from Safe Crest Insurance Inc. can walk you through this process.
Step 3: Get Quotes (A few minutes)
After narrowing down your options, request quotes from several providers. Most companies have online tools to provide estimates based on your age, health, and desired coverage. At Safe Crest Insurance Inc., we can get quotes from several insurance companies at once, simplifying the process.
Step 4: Apply for Coverage (30 to 45 minutes.)
After selecting a policy, complete the application form. Ensure you have the following information available when doing so:
Details of any current life insurance policies
Information about your family doctor and any specialists you have consulted
Banking information, such as a void cheque, depending on your payment method
Step 5: Undergo Medical Underwriting (1-4 Weeks)
Depending on the level of coverage purchased, some companies might require a medical examination. For amounts typically under $1,000,000, this is a phone interview over the phone which lasts 45 minutes to an hour. For higher amounts, a health practitioner will come meet with you. These appointments can be arranged at your convenience and often providers will come to your home or work.
If the insurance company needs information from your family doctor or any specialists you've consulted, it's advisable to inform them in advance about the upcoming request. Medical offices are sometimes slow to respond to these requests, potentially delaying the underwriting process.
Not until the insurance company receives all the completed information does it start the underwriting process.
Step 6: Underwriting Decision
The five common underwriting decisions are:
Approved as Applied
This is the outcome most people hope for!
Standard Approval: Your coverage is approved at the regular rates based on your age and health.
Preferred or Preferred Plus: If you’re in excellent health, you may qualify for lower-than-average rates, saving you money over time.
Safe Crest Tip: Our advisors help you prepare so you have the best chance of qualifying for preferred rates.
Approved with a Rating (Substandard)
Your coverage is approved, but the insurer adds an extra cost to account for higher risk. This might happen if you have a health condition like diabetes, a high BMI, or a hazardous occupation.
Good to Know: We can shop multiple insurers to find the most competitive offer for your situation.
Postponed
Sometimes, insurers press pause instead of saying no.
This can happen after recent surgery, a new diagnosis, pregnancy, or if more medical tests are needed.
You can reapply once the waiting period is over or after providing additional medical information.
Declined
If the insurer decides the risk is too high, coverage may not be available right now.
Common reasons include serious medical conditions or recent major health events.
A decline doesn’t mean “never.” You can often reapply after your health improves or circumstances change.
Approved with Modifications
Rather than declining your application, the insurer might offer you coverage with changes.
Examples: lower face amount, shorter term length, or removing certain riders.
This option still gives you meaningful coverage when a full approval isn’t possible.
A Safe Crest advisor can walk you through the underwriting decision and decide on the next steps.
Step 7: Review and Finalize Your Policy (1 Week)
Once everything is finalized, your policy will be delivered. This can take an additional week or two, but knowing your family is protected provides peace of mind.
Final Thoughts
Acquiring life insurance in Alberta can be a straightforward process with the right guidance. An experienced advisor can simplify each step, ensuring that families feel confident in their decision-making. By addressing key questions and outlining the purchasing process, an advisor helps families navigate this important choice with assurance.
Life insurance represents more than just a policy; it’s a commitment to protect your loved ones and secure their financial future. Whether you’re a new parent or planning for the future, taking the first step toward obtaining life insurance with the help of an advisor can bring invaluable peace of mind.
If you have questions or need assistance, reaching out to a local insurance agent can be incredibly beneficial. They will guide you through the process, making it easier to select the life insurance policy that best meets your family's needs and ensuring that you feel confident in your decision.
Taking care of your family’s future is one of the most important decisions you can make. Why wait? Start securing your family’s financial future today!
Comments