Life Insurance for Nurses in Canada
Are you a nurse? Discover what life insurance options are available to you!
11 Minute read
Published: July 15, 2024
Life Insurance for Nurses in Canada
Are you a nurse? Discover what life insurance options are available to you!
11 Minute read
Published: July 15, 2024
Nurses are the backbone of the medical field, and nursing is a well respected occupation in Canada. However, nursing is a physically and mentally demanding job which is why life insurance for nurses is even more essential. You can find out what options are available to you in this complete guide.
In this article:
Why Get Life Insurance as a Nurse
As an essential worker in the medical field, nurses are more often exposed to contagious illnesses, perform many physically demanding tasks, and work in a high-stress environment. Because of this, there is a higher likelihood that their health may be negatively impacted over time. For this reason, if you are a nurse, life insurance can be a necessary tool in safeguarding your family from any financial hardship in the future. The main ways life insurance are used by Canadians include the following:
Final Expenses: Funerals, memorials, and other final expense costs are a common consideration when purchasing life insurance. Setting aside enough money to cover these costs can provide peace of mind to your family during an already difficult time.
Future Financial Commitments: It’s important to take into account future financial commitments in addition to present debt and income. This covers things like mortgages, anticipated family milestones, and the cost of a dependent’s education. Life insurance can be a way to protect your family’s financial future, and ensure these responsibilities can be fulfilled even if you are not around.
Income Replacement: In the event of the policyholder’s passing, one of the primary purposes of life insurance is to assist in replacing lost income. Nurses should think about how many years of income replacement would be necessary to maintain their family’s standard of life, especially if they are the primary breadwinners.
Offsetting Estate Taxes: If you want to leave your heirs a property, such as a family home or cottage, life insurance can help facilitate this transfer by providing enough funds to cover any costly estate taxes. This ensures you are not putting any financial burden on those who inherit your property.
Retirement Savings: If you have little saved for your retirement, you may need to purchase additional life insurance to protect your spouse’s finances in the case of your passing.
Types of Life Insurance for Nurses in Canada
If you are interested in life insurance for nurses in Canada, then there are four main options you can choose from. Which policy is best for your situation will depend on your coverage needs and financial goals as each policy type has unique advantages and disadvantages. The main policy types are as follows:
Term Life Insurance
If you are interested in a flexible policy that offers coverage for a set period of time, then term life insurance may be the best option for you. This is a great option for nurses who are still advancing their career and expect their financial situation to change over time, or for any nurses who have a temporary financial obligation such as a mortgage. Term lengths are often around 10, 20, or 30 years and at the end of a term policyholders typically choose to either renew the policy, convert the policy to permanent coverage, or switch to a new policy altogether.
The main advantages of term life insurance include:
- Term life insurance is the most affordable option when it comes to Canadian life insurance.
- This type of policy offers great flexibility as it allows policy holders to reassess their coverage needs after each term.
- Terms can coincide with life events such as a new child, shared debt like a mortgage, etc.
Here is a look at the monthly premium rates for males and females aged 40-45 for a 10-year term life insurance plan with $1,000,000 in coverage.
Whole Life Insurance
Whole life insurance is an ideal option for Canadian nurses interested in permanent life insurance coverage with a stable investment option. Unlike term life insurance, whole life insurance policies provide coverage for a policyholders entire life. Another unique feature is the cash value amount that grows at a fixed rate. This is a relatively safe investment that allows policyholders to borrow against or withdraw any funds accumulated during the life of the policy.
The main advantages of whole life insurance include:
- Permanent coverage allows you to lock in a premium rate for life which can facilitate savings in the long term as your premiums won’t increase with age.
- Whole life insurance policies allow you to build cash value at a fixed rate, making it a safe investment vehicle.
- If the investment option does well you may receive dividends which can be put towards your life insurance premiums.
Here is a look at the monthly premium rates for males and females aged 40-45 for a whole life insurance plan with $1,000,000 in coverage.
Universal Life Insurance
Universal life insurance is similar to whole life insurance since it also offers permanent life insurance coverage, the main difference is the investment option. Unlike whole life insurance, universal life insurance leaves the cash value investment up to the policyholder and it does not grow at a guaranteed rate. Policyholders can borrow against or withdraw from the cash amount, or have minimum funding in the account meaning it will be structured similar to term life insurance.
The main advantages of universal life insurance include:
- Permanent coverage that offers lifelong coverage even as you age or your health status changes.
- Universal life insurance offers a hand-on cash value that may provide higher yields than whole life insurance.
- Policyholders have the option to provide minimum funding, making the policy more straightforward without the need to manage an investment component.
Here is a look at the monthly premium rates for males and females aged 40-45 for a minimum-funded universal life insurance plan with $1,000,000 coverage.
No Medical Life Insurance
Along with the standard types of life insurance, all Canadians have the option to get a policy without medical underwriting, known as no medical life insurance. This type of policy is ideal for nurses who have any medical conditions or disabilities that may affect life insurance eligibility or premiums. This can include common health concerns among nurses such as mental health conditions, history of heart attack, back problems, and more. If you opt for no medical life insurance you will not be required to undergo a physical health exam, provide fluids, or submit an attending physician’s statement. You may be asked to answer limited health related questions but whether this is required and which questions may be asked will depend on the policy you choose. However, no medical life insurance is typically more expensive than fully underwritten life insurance due to the increased risk to the insurer.
The main advantages of no medical life insurance include:
- No medical life insurance is available to all Canadians, even those with pre-existing health conditions who have previously faced policy denial.
- Applications are approved much faster and some insurers even offer instant approval.
- You won’t have to undergo a medical exam, provide any fluids, and will at most be asked limited medical questions.
No medical life insurance is available either as term or permanent life insurance coverage. Here is a look at the monthly no medical life insurance rates for males and females aged 40-45 for a 20-year term with $500K in coverage.
Life Insurance Through Workplace Benefits or Nurses Association
Many nurses can benefit from insurance through their nurses association. For example, the Ontario Nurses Association offers term life insurance through their group benefits plan. While life insurance through workplace benefits or a nurses association is an option for nurses in Canada, these plans offer less flexibility than a personal policy. With set minimum and maximum coverage amounts and rates only being offered through a specific insurance provider, these plans aren’t always a viable option.
It’s essential to review your coverage options thoroughly and find a policy that best suits you and your families needs. By choosing your own policy from one of the many top Canadian life insurance providers, you will be able to compare premium rates, benefits, and coverage types and find the policy that is best suited to your unique circumstances.
Beneficial Life Insurance Riders for Nurses
A life insurance policy rider is an additional benefit that you have the option of choosing to add on to a life insurance policy. There are typically various riders to choose from so that you can choose which ones meet your needs the best. Here are some popular life insurance rider options for nurses:
Waiver of Premium: If you were suddenly unable to continue working due to the onset of a disability or illness, this life insurance rider would allow you to continue receiving life insurance coverage without the need to pay for life insurance premiums.
Critical Illness Insurance: While critical illness insurance can be purchased as a separate policy, it can also be offered as a rider on a life insurance policy. This type of insurance pays out a tax free lump sum payment if you are ever diagnosed with a serious illness covered by the policy. This payment can help cover the cost of treatments, transportation, lost income, and more.
Disability Insurance: Disability insurance is similar to critical illness insurance since it can be purchased either as a life insurance rider or separate policy. The difference between the two is that disability insurance pays out a tax free lump sum payment if you were to suddenly become disabled. Included disabilities vary by policy but some examples include injuries, arthritis, depression, stroke, cancer, and more.
Case Study Example
Olivia is a 40-year-old nurse who’s been working and volunteering in the healthcare system for almost 20 years. Olivia is interested in obtaining life insurance but after checking with her province’s nursing association, she decides she would like more flexibility than is offered through the insurer they’re partnered with. Her primary goal is to cover end-of-life expenses but she is also interested in a critical illness rider since her family has a history of heart attacks.
Here are the main considerations Olivia has when determining her coverage needs:
- Olivia is only interested in obtaining around $25,000 of coverage since this is enough to comfortably handle her end-of-life expenses and leave some financial cushioning for her family.
- Given her family’s history of heart attacks, Olivia wants to ensure that she has a critical illness rider that can provide financial support if she were to suffer a heart attack or another serious health issue.
Olivia reaches out to a life insurance expert and explains her current situation. While her family has a history of heart attacks, she is in good health with no current pre-existing conditions.
Olivia evaluates her options and decides on a term life insurance policy with $25,000 in coverage. This policy will provide her with the flexibility she needs and allow her to reevaluate her policy one the term ends. The policy also includes a critical illness rider that would provide a lump sum payment if Olivia were ever to suffer from a critical illness such as a heart attack.
Frequently Asked Questions (FAQs) about Life Insurance for Nurses in Canada
There are many well established life insurance providers in Canada, which one is best for you will depend on your specific needs. If you are looking for no medical life insurance then a company such as Canada Protection Plan or Assumption Life may be a good choice. For customizable term insurance, Manulife or Sun Life Financial may be good options. If you need help determining which company to purchase a policy from you can contact us here, or check out our blog on The Best Canadian Life Insurance Providers.
Many nursing associations and workplaces may offer group life insurance policies to nurses. These can be a great option if you are only interested in basic coverage. However, if you would like more flexible or customized life insurance, you should consider finding your own personal life insurance policy. This will allow you to tailor your policy to you and your family’s unique needs.
Yes, life insurance is worth it even if you are in good health. In fact, being proactive and purchasing life insurance while you are still healthy can help you lock in a more affordable rate. If you do have a pre-existing condition or are in otherwise poor health you can still qualify for life insurance through a no medical policy, though it is typically less affordable than fully underwritten life insurance.
Find a solution that’s right for you.
With so many great options for nurses, it can be daunting trying to figure out which option is the best for you and your family. That’s why we’re here to help! Here at Protect Your Wealth we work with you to find the best life insurance policy tailored to your specific needs. We have been providing expert life insurance solutions since 2007, and have helped many clients achieve financial security for their families.
Contact us today or call us at 1-877-654-6119 to talk to one of our expert advisors! We’re proudly based out of Hamilton, and service clients anywhere in Alberta, British Columbia, Manitoba, and Ontario, including areas such as Dundas, Burnaby, Lethbridge, Vaughan.
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