- Very few people readily have the funds necessary to take care of their current obligations after their deaths.
- Any premium increases that may happen because of the pandemic would only affect a small portion of policyholders.
- If you already have an existing life insurance policy, you will be covered for a claim associated with COVID-19.
As of June 17, an estimated 26,012 Canadians have died because of COVID-19, with most people succumbing to the disease in Quebec (11,156), followed by 8,807 deaths in Ontario, and 2,251 in Alberta. Such is the toll this dreadful pandemic has had to date on our population.
The COVID-19 crisis has fuelled an increased interest in life insurance policies, and for good reason. If you are one of many people considering getting a policy, you can take heart knowing with few exceptions, any manner of death is covered by life insurance, including COVID-19.
But some folks may still be on the fence as to whether or not they should invest in life insurance, or they might be misled into believing one of many life insurance myths.
Understanding term and permanent life insurance and their respective benefits mean sifting through life insurance myths first. There are pros and cons for each type of policy. Determining which is best for you comes down to your needs, budget, and long-term financial goals.
We’ve taken a look at the most common misconceptions and questions surrounding term life insurance to set the record straight and to help you make the right choice for you and your family:
Myth no. 1: I am too young to need life insurance.
False. Very few people readily have the funds necessary to take care of their current obligations after their deaths. If you have anyone who relies on your income for their day-to-day needs, like an elderly parent or child, or if you have debts like a credit card or car loan, then you likely need life insurance.
Your age isn’t what’s important here. What is, is whether or not you’ll be leaving anyone behind who would be worse off financially. Even if you have no dependents, someone will still be responsible for your student loan or car payments. And the good news is that life insurance is inexpensive for young, healthy people. Buying life insurance now means you’ll be providing financial security for your loved ones without spending a lot of money on it.
Myth no. 2: Life insurance is only important if you have kids.
False. While it is true that there’s much less at risk for couples to forgo life insurance if they don’t have children, you still have to think about your partner. Chances are they rely on your income to a certain degree, whether to pay rent or the mortgage, as well as things like monthly utility bills and car payments. Ask yourself, “Could my partner manage all of our current financial obligations alone?” Maybe, but probably not.
Myth no. 3: The COVID-19 pandemic will drive up life insurance premiums.
“Probably not”, according to the Chair of the Canadian Institute of Actuaries (CIA) Research Council. The spike in pandemic-linked claims seen in the middle of the first wave was “noticeable” but within the range of what insurers built into their reserves and capital allowances.
CIA report notes, “This is an emerging pandemic, and the ultimate assumptions and conclusions will not be known for some time. At the time of this writing, several other strains of this virus are emerging. It remains to be seen what impact those variants will have on any assumptions.”
. A June 2021Nevertheless, with guaranteed life insurance policies, which is a type of permanent or whole life insurance, premiums are fixed. A move to higher premiums for these policies would only affect those taking out new policies or policyholders who want to increase or enhance their existing policies.
Myth no. 4: I have life insurance through my job. I don’t need any more coverage.
Maybe. But the truth is that employer-provided life insurance coverage may not be enough to protect you and your loved ones as much as you think. Also, will you still have the coverage you need if you leave your place of employment? Review how much your employer-paid insurance provides and calculate if it is enough to accommodate your family if you’re not around. Generally, it’s recommended you have five to 10 times your annual, pre-tax salary in life insurance protection.
Myth no. 5: I have coverage from my mortgage lender. It’s enough.
No, it’s not. Mortgage life insurance pays off your mortgage if one of the people listed on the loan dies before it’s settled. That’s it. What about the rest of your debts and expenses? Term life insurance offers coverage that can be used for anything, including funeral expenses, paying down a mortgage, car loan and credit cards, or offsetting the loss of income into the family finances.

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Myth no. 6: If I die of COVID-19, it won’t be covered by my policy.
False. Life Insurance is a contract, and the insurance company agrees to pay out a lump sum of money to the insured person’s beneficiaries if the insured passes away. If you already have an existing life insurance policy, you will be covered for any claims associated with COVID-19. In other words, if you were to die because of COVID-19, your beneficiary will be able to make a claim in the same manner as a death caused by any other natural disease or ailment. Life insurance policies do not treat deaths caused by COVID-19 any differently from those caused by any other flu, infectious disease, or natural cause.
Myth no. 7: I won’t be able to get insurance because I smoke or vape.
Not true. If you smoke or vape, here’s good news: Many life insurance companies consider you a non-smoker once you’ve been smoke-free for one full year. If you still smoke, you will pay a bit more for coverage than a non-smoker, but it’s likely to be more affordable than you think.
Here are examples of quotes for term life insurance if you live in Toronto run through RATESDOTCA’s free-to-use online quoting tool for a 10-year term and $250,000 coverage for smokers who are in good health overall:
Age | Gender | Annual Premium 10-Year Term |
---|---|---|
30 | Male | $282.50 |
30 | Female | $182.50 |
35 | Male | $315 |
35 | Female | $237.50 |
40 | Male | $450 |
40 | Female | $342.50 |
45 | Male | $725 |
45 | Female | $492.50 |
Myth no. 8: If term life insurance is so cheap, there must be a catch.
There’s no catch. A basic term life insurance policy will offer you coverage as long as you pay your premium. Plus, your premium is fixed for the length of the term and won’t increase even if the status of your health changes within it.
Myth no. 9: It sounds like everyone needs a whole lot of life insurance, right?
Wrong. Insurers often see clients with hundreds of thousands of dollars in coverage when they require a much smaller amount to take care of their needs, especially if they have no dependents or high expenses. Do the math and come to the right number for you. Some circumstances require higher coverage amounts, such as having a large mortgage that you don’t want to leave to a partner or other family to pay off, or if you think you’ll have a big tax bill to pay. If you have a young family or disabled children who may need ongoing support, you probably also need a higher coverage amount.
Myth no. 10: It’s such a hassle to get life insurance.
Not true. Getting life insurance quotes is fast, easy, and free. Even if you don’t feel ready to talk to someone, you can use RATESDOTCA to compare prices, options, and insurance policies. And when you are ready, you can request a call back from a licensed insurance broker to guide you through the process. Any hassle you may think it is now is nothing compared to what your loved ones will endure if they are left managing your debts. Comparing life insurance quotes only takes a few minutes. You might be surprised by how little a sense of security costs.