Life insurance is a tax-free lump-sum payment to help your family avoid financial ruin if something happens to you. It can help your family maintain their standard of living. It can provide for your partner, children, or other dependants. It can pay off your debts, including a mortgage, so your family doesn’t have to worry about losing their home.
Today I’m interviewing PolicyMe, an exciting Canadian insurance provider. They make applying for life insurance quick and easy. The application process takes only 15 minutes, and you get a decision instantly! Their streamlined process – with no commission sales – ensures you get the right coverage for your individual needs, at a low cost.
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Key Takeaways:
- Life insurance is for anyone who has other people dependent upon them financially – homeowners, working- and stay-at-home parents, expecting parents, retirees, or even co-owners in a business venture.
- PolicyMe has cut out inefficiencies to bring Canadians life insurance at low low rates for the same coverage.
- Apply and get approved in under 15 minutes, from the comfort of your home – no medical exam!
- Life insurance is better than mortgage insurance for many reasons.
- If you already have life insurance elsewhere, check if you can get a better rate with PolicyMe because they make it easy to switch.
Q1. Before we start, can you please introduce yourself to my readers?
Hi, my name is Tobin and I’m a senior licensed life insurance advisor here at PolicyMe and have been since September 2019. I was one of the early employees actually, so I’ve been here for a while and witnessed the evolution of the company.
Q2. There have been some exciting changes at PolicyMe. Can you please tell us about that?
Yes! In March 2021 we launched our own brand of term life insurance!
We’ve been able to cut out a lot of inefficiencies in the life insurance world, both on underwriting and distribution costs. Because we cut out those inefficiencies, we’ve saved money, and we pass those savings to you, our customer, through lower premiums.
That means we can offer lower rates for the exact same quality and coverage of insurance you could get from another company.
We also don’t have a sales team! No one is pushing our product through commissions. In fact, all the advisors at PolicyMe are non-commissioned, which means you can be confident that you’re getting advice tailored to you because there’s no up-selling.
We’re able to offer one of the cheapest rates in the market through all these methods, so we’re proud that we’ve been able to make the life insurance process both easier and more affordable!
Q3. How does PolicyMe’s application process work?
When I got my first life insurance policy 20+ years ago, I remember it was time consuming and involved process of meeting with a broker, making an appointment to see a nurse for an exam, waiting for the results of that, and trying to decide how much insurance was the right amount. I’m guessing it’s a lot easier now with PolicyMe!
That was actually our goal from the beginning – to make getting a policy a lot easier, faster and more affordable too!
With the traditional process, you’ll have to apply for the application, then book a time with a nurse to answer all the medical questions, then you might have a blood and urine test, and then even after all that, there may be follow-up requirements! In general, that takes a couple of weeks. All the back and forth is also frustrating because you don’t get your approval decision until the end of those weeks.
With PolicyMe, we’ve changed the process. When you go on our website and start the application, we’ve taken all those questions that are asked to you by the healthcare provider, and we’ve put them in the application on our website. When you apply, you can answer all of those medical questions right then and there. We then put it through an automated system that checks all those answers, and if you are healthy enough, depending on your answers, you can be approved right on the spot. You can just go in, apply, put in your info, answer the medical questions, and then you get your decision instantly!
All this takes around 15 minutes. Compare that to the old process which took weeks or even months of back and forth, and now we’ve finished it in minutes.
Usually we’re able to approve the life insurance policy for most of our applicants right away. There are some cases though where we can’t give an instant approval, and if that’s the case, we’ll tell you the additional requirements right away.
And in most cases, this additional requirement is not necessary. There’s only certain conditions, ages or amounts you’re applying for that are going to trigger an additional requirement.
Q4. I’ve heard that PolicyMe has the lowest life insurance rates in Canada. If I get a quote from PolicyMe and it’s less than I’m already paying for term life insurance somewhere else, can I switch? How hard is that to do?
That’s a great question! Yes, you can. And it’s not hard – it’s super easy actually.
If you want to switch, you simply let the life insurance company know that you don’t want your policy, and then you just stop paying. There’s no fees, no repercussions or any type of penalty. People switch all the time as their situation changes.
Then, if you want a policy with us, when you fill out your application, we have a question saying, “Do you have life insurance? And if so, are you replacing that policy with this new policy?” Then you answer, “Yes, I’m replacing my old policy.” And that’s it! We take care of the rest.
Before you start a policy with us, we’ll also take the time to actually make sure that replacing your policy is the right move for you, because the last thing we want is somebody letting go of a great life insurance policy for something they think is better, but actually isn’t. In all instances we’ll check to make sure that it is the smart move for you to actually replace your policy.
And if it is the best move to replace your policy, then you can just cancel that old life insurance policy whenever the new one is approved.
Q5. How much life insurance do you really need?
It really, really depends. There’s no one size fits all. The main thing is having a conversation with your loved ones of what they would do if you were suddenly gone. How will they maintain their lifestyle? What are your current and future expenses that you need to plan for? That all boils down to a formula, and then combined with your personal and financial situation, you can figure out how much protection you need and for how long.
This all can get slightly complicated, so I recommend going to PolicyMe’s life insurance calculator. We’ll ask you a few questions about your lifestyle, personal and financial situation, and based on that, give you a tailored recommendation for the amount of coverage you need and for what term length.
Q6. At what age should you get life insurance? And do you have some advice for people in their 20s and 30s when buying their first life insurance policy?
My biggest regret when we got our original life insurance policies was that we chose a 20-year term. At the time, 20 years seemed like a really long time! But 20 years on, our kids are still dependent on us (the youngest is 11), and we still have a mortgage. When we needed to renew those policies, the rates were MUCH higher.
Yes, so that’s a great question. That’s a bit more of a complicated question as well.
We recommend choosing the longest term that matches how long you need to financially protect your loved ones. For example, if you have kids, do you think they’ll be independent by 20? 30? That’s a good way to determine how long you need coverage for.
As you get older, your rates also increase. If you bought a 10-year term and want another 10-year term after the first one ends, your rates will be higher as you are older and maybe your health has changed slightly.
Again, I’m just going to recommend our life insurance recommendation quiz here. We recommend both the coverage amount and term length personalized for you, so if you’re not sure how long you need to be covered for, that’s a great place to start.
Q7. Can you get life insurance if you are pregnant?
Yes, there’s no problem at all for the first two trimesters. In the third trimester, there’s still not a problem, but the life insurance company probably wants to wait until a healthy baby is born before they’ll make a decision.
So if you’re considering buying life insurance when you’re pregnant, I’d encourage sooner rather than later.
Q8. If you are a stay-at-home parent, do you still need life insurance?
Yes, absolutely.
For example, if someone passed away who was a stay-at-home parent, then the other parent now either has to become stay-at-home and lose their job, or hire help so they can continue to do their job. In either instance, you need the protection of a life insurance policy to take care of your kids and maintain your current lifestyle, so yes, stay-at-home parents absolutely need life insurance as well.
Q9. Do you need life insurance after you retire?
Usually, the answer is no. However, there are many exceptions.
The main consideration is, “Is there a reason that if you passed away now, someone else would need that life insurance payout money to fill some need that you provided?” If the answer is yes, you need life insurance. If not, then you don’t.
Q10. Is life insurance better than mortgage insurance for new home owners?
This is an easy one. Always life insurance! One of the main reasons is the life insurance payout goes directly to your beneficiaries, so they can spend it however they want to. Whereas with mortgage insurance, that payout goes to the bank, not to your loved ones. The mortgage payout can only be used to pay off your mortgage, and not for anything else.
I understand that mortgage insurance can seem attractive in certain ways. However, there are many drawbacks to mortgage insurance. First, it’s never guaranteed. Secondly, they never asked you the health questions upfront, so claims are always investigated once there is a claim. That’s called post-claim underwriting and it’s not good. And if you change your mortgage, renew it or get a new one, you’re need to get new mortgage insurance and all of a sudden your rates go up because you’re older.
There’s no guarantee on it, where it’s just locked in for a certain amount of time. Some companies attempt to do some guarantees, where it is transferable if you stay within the company, or something like that. But the terms are mainly stacked against you and you are going to have to fight to get the claim approved.
So life insurance, it’s definitely better because it’s guaranteed from the beginning and you do the medical check-ups upfront. Life insurance is also so much flexible. It’s attached to you, not to your specific mortgage.
Kari: I would also add that the value of mortgage insurance falls over time, because you are in the process of paying off the mortgage. So if something were to happen to you 15 years on, the payout from mortgage insurance would be a LOT less. Whereas the payout from life insurance stays the same.
Q11. Should you get your own life insurance policy if you’re already covered through your employer? Can you have 2 life insurance policies?
Yes, you can have as many life insurance policies as you want. There’s no limit whatsoever in the number of policies. However, there is a maximum limit for the amount that you can be covered for. In most cases, that maximum limit depends on your income, generally between 10 to 25 times your income.
The amount of coverage you should get, again, depends on your situation. You want to make sure your family is protected with enough coverage in case the unexpected were to happen. I recommend taking our life insurance recommendation quiz to check the ideal amount that’s right for your situation.
Generally, the life insurance policy you have through your employer is not enough to protect your loved ones, so you should get your own life insurance policy to make sure the coverage is enough. In our life insurance checkup, we’ll ask you if you have existing coverage, and then determine your ideal amount taking that factor into consideration.
Q12. Is there anything else you would like to share with my readers?
Yes, I’d like to highlight the difference between the fully underwritten life insurance versus post-claim underwriting insurance.
Many people are worried whether their policy is going to pay out. If your policy is fully underwritten, it’s the highest guarantee you can get in Canada that you will receive a pay out. As long as you were truthful in your life insurance application and your situation doesn’t fall into an exclusion, then the life insurance company will pay the claim.
The standard exclusion across most policies are the life insurance company won’t pay for suicide within the first 2 years. There might be additional exclusions on a case-by-case basis, like if you’re a frequent skydiver, then your policy might not cover skydiving.
Again, the most important point here is to make sure you get fully underwritten life insurance! At PolicyMe, we only offer full underwritten policies to make sure our clients get the best value.
Thank you so much for your time, Tobin, to answer all my life insurance questions!
Check today to see if PolicyMe can offer you lower rates than what you’re paying elsewhere. You’ll find out in only 15 minutes! And there’s nothing to lose.
It’s interesting to read about life insurance in other countries like Canada, especially when I compare how it is in Belgium. I also like the flow chart provided 😛 Very well written!