Whether you are a student or a refugee, you must understand the importance of life insurance as a non-resident in Canada. To get life insurance in Canada, you must have a student permit or must be working. However, navigating the intricacies of securing coverage is challenging if you don’t have the right financial guidance. This blog aims to provide a comprehensive guide about life insurance for non-residents in Canada. Read the blog to understand the nuances of life insurance in Canada and make informed decisions regarding their financial well-being.
Understanding Life Insurance in Canada
Life insurance is a contractual agreement between an individual and an insurance provider, wherein the insurer promises to pay a designated beneficiary a sum upon the insured person's death. This financial protection can help cover funeral expenses, outstanding debts, mortgage payments, and education costs, and support the financial stability of loved ones. To choose the best life insurance, you must hire an expert to understand how does life insurance works in Canada.
Can Non-Residents buy Life Insurance in Canada?
Yes, if you are a non-resident in Canada whether temporary or permanent, you are eligible to buy life insurance in Canada.
You are eligible to buy life insurance if you fit into one of the below criteria:
- You have a valid student visa.
- You have a valid work permit.
- You have a convention refugee status.
Depending on factors like age, health condition, residency status, and purpose of stay in Canada, your premium and term of coverage are decided.
What kind of Life Insurance is Available for Non-Residents in Canada?
There are two main types of life insurance offered in Canada for newcomers listed as the following:
- Term Life Insurance: When it comes to affordable life insurance in Canada for non-residents, Term life insurance tops the list. It offers coverage for a specific time period ranging from 10 to 30 years. The beneficiary receives the death benefit if the policyholder passes away in the time span. However, the benefits are not guaranteed for a lifetime, but if you have a limited budget or a time-specified budget, term life insurance is the best option.
- Permanent Life Insurance: Contrary to term life insurance, permanent life insurance offers lifelong coverage where the payout is guaranteed. Also, it includes options such as whole life insurance and universal life insurance. However, the policy is expensive compared to term life insurance. This type of coverage often involves an investment component, providing opportunities for cash value growth over time.
How to apply for Life Insurance as a Newcomer to Canada?
When you plan to apply for life insurance in Canada, you must be considerate about the coverage you want and your monthly affordability range for premiums.
Once you have these, here’s a step-by-step guide to getting life insurance:
1. Researching insurance providers
If you are a newcomer non-resident, it is imperative to research and compare different insurance providers to find the most suitable coverage options. Consider factors such as the company's reputation, financial stability, customer reviews, policy features, exclusions, and pricing. You must connect with an insurance expert to overcome any complexities during applying for life insurance.
2. Deciding the type of life insurance
Once you have the insurance provider, you must determine what type of life insurance you need. As discussed above you can either choose from term or permanent life insurance. Term life insurance is better if you want insurance for a mortgage or want financial security for some time. However, if you are into estate planning or want life insurance as an investment tool, go for permanent life insurance.
3. Premium coverage
Life insurance in Canada costs the same for both newcomers and citizens but coverage premiums for both. The maximum coverage you can get as a newcomer or non-resident is $500,000 whereas citizens and permanent residents receive %5,000,000 or more coverage. There are several factors like your age, health condition, lifestyle choices, and policy type that determine your premium price. Non-residents may also encounter higher premiums due to the potential lack of Canadian health records and limited access to medical examinations.
4. Reviewing and adjusting coverage
Life insurance needs may change over time due to factors like marriage, having children, purchasing property, or starting a business. Non-residents should review their coverage periodically and consider adjusting it to reflect current circumstances and financial goals.
5. Beneficiary designation
As a newcomer or non-resident, you must designate a beneficiary who will receive the death benefit when obtaining life insurance. Carefully consider your options and ensure the beneficiary designation aligns with your wishes. Regularly reviewing and updating beneficiary information is essential to account for any life changes or circumstances.
6. Documentation and application process
Once you have your insurance, you will need to provide documentation such as proof of identity, proof of residency, and information about your medical history. You may be asked for more documents depending on specific information required by your insurance provider. It is essential to be transparent and provide accurate information during the application process.
7. Book a life insurance medical examination
Having a fully underwritten life insurance plan requires a paramedical examination which you can schedule at your convenience. Being a newcomer to Canada, you likely will have to undergo a stricter medical examination. Said that you will have to undergo tests for HIV and hepatitis.
8. Pay the first premium
After a week or two, if you pass your medical examination without raising any red flags, you will receive the coverage and the premium you have to pay. And once you have paid the first premium, your policy gets activated.
What are the Other Types of Life Insurance Important for a Non-Resident?
It is imperative to have all your finances covered for a secure future in Canada and there are different types of life insurance to do that.
Other than having a term or permanent insurance, here’s a list of insurance that you might need:
- Disability insurance
- Vehicle insurance
- Health insurance
- Tenant and property insurance
- Critical illness insurance
Get your first Life Insurance Easily at Life Simple
Regardless of your residential status in Canada, having life insurance is crucial to get financial protection for yourself and your loved ones. But securing coverage as a non-resident in Canada may involve additional considerations, understanding the eligibility criteria, policy types, application process, and tax implications can help non-residents make informed decisions. And for this, you must seek the right financial provider after conducting thorough research.
Being the leading online platform, Life Simple has made getting life insurance a hassle-free process for newcomers and non-residents in Canada. Apply now and get rates in less than 10 minutes. Also, you can connect with our experts to understand which is the best life insurance for you.