Insurance is an important consideration all Canadians must make for their health. This is especially true for international students. The stress of being in a new surrounding can be a lot to overcome. Not to mention the pressure that comes with trying to succeed when you leave your home country to study for school.
What is even worse is when you have to worry about your medical expenses and wellbeing when you are away. This is why it is an important option for students in Canada.
Before you immigrate, it is important to understand the ins and outs of how health care works in Canada.
While the Canada is renowned all over the world for its free health care, that benefit does not apply to international students. This is why it is mandatory to sign up for policy coverage for the duration of your study program before traveling to the country.
To make an educated decision, it is first important to understand what it is and what options are available for students to take advantage of.
What is Life Insurance?
It is an agreement between you and the insurer. It ensures that your family is taken care of financially in the event of your passing.
The beneficiaries of the policy receive a tax-free payment which may help them replace the lost income and even help with paying your final expenses. These expenses include things like funeral costs etc.
Life insurance also comes in handy to pay off any debts you leave behind like your mortgage. Perhaps the most important benefit is that it will ensure that your family can maintain their standard of living after you are gone.
It is important to understand that a policy’s protection is not for you. It is for the people you leave behind. Getting a policy will help protect the financial future of people that depend on you.
In Canada, insurers fall under the regulation of provincial law. Every insurer is required to be licensed under their respective provincial regulator. It can be purchased through an online broker like DundasLife.com.
Regulators have strict requirements insurers must adhere to if they wish to provide a service in the province. One of the biggest requirements is that the insurer must be in financially good health.
This ensures that they will always have enough capital to pay out a policy if needed.
Why is Life Insurance Important for Students in Canada?
If you are a student in a new country, you have a lot on your plate. Your responsibilities include maintaining good grades and graduating on time. While you may not think about life coverage, it can help reduce your stress levels.
Expenses like student loans and tuition fees can add up when you decide to study abroad. Not to mention all of the costs and the investment that goes into you when you live in a foreign country. Having coverage will make sure that your family is compensated in case of your untimely demise.
Here are some of the most important reasons to get a policy if you are a student in Canada:
For most college students, student loans are essential to pay a part of their tuition fees. When it comes to federal student loans if the person dies before paying off the debt it is forgiven. However, traditional student loans still need to be paid like any other debt.
Traditional student loans also require you to have a co-signer. This is the person who becomes liable for your debt in case of your passing. This is why a student needs to consider having coverage.
In most cases, the repayment schedule of the debt is accelerated in case of death. This can put your co-signer under considerable financial stress. Having a life policy will pay off the remainder of your student loan debt and protect the co-signer.
While it is not a common occurrence, sometimes a student may get married and have people that depend on them financially. Another example is people who are older and have started their studies late.
This is also when life insurance can come in handy. It can provide financial protection to your spouse and kids in case of your death.
In instances where your parents are financing your education, it can help them financially. This is because the parents may have taken out a loan to pay for the student’s education. In case of the students passing, this debt still needs to be paid off.
Life insurance can help your parents with some of this burden and help them repay the debt.
Types of Life Insurance
There are two main types of options available to students in Canada.
1. Term Life Insurance
Term insurance is a policy in which you are covered for a set period. This can be 10 years, 20 years, or 30 years. This option is usually the cheapest for most people.
2. Permanent Life Insurance
This policy does not expire. It provides coverage for your entire lifetime and pays out whenever you pass away. There are different types of permanent insurance options. These include universal and term-to-100 coverage.
Universal life insurance is calculated according to your investments in the policy. Term-to-100 covers you till the age of 100 but has no cash value.
How Much Does Life Insurance Cost?
Policies are usually customized according to the requirements of the client. This is why they tend to have varied prices. It can be as little as $13 a month to $100 a month depending on your requirements.
Other factors that can affect the cost of your plan include:
- Your health
- The amount to be paid upon maturity
- Your debt
- Your risk of injury
Life insurance is something no young person, especially a student considers getting. The fact is that it is an essential option, and depending on your circumstances can provide massive benefits for the people you leave behind.
If you feel like your dependents or your parents will struggle financially after you pass, purchasing a policy may be the biggest gift you leave behind for your loved ones.