Life Insurance for Pharmacists

Are you a pharmacist? Discover what life insurance options are available to you!

9 Minute read

Published: August 20, 2024

Life Insurance for Pharmacists

Life Insurance for Pharmacists

Are you a pharmacist? Discover what life insurance options are available to you!

9 Minute read

Published: August 20, 2024

Life Insurance for Pharmacists

As a pharmacist, you play a vital role in the healthcare system, ensuring patients receive the correct medications and advice to maintain their health. While you dedicate your career to caring for others, it’s equally important to consider your own financial well-being and the security of your loved ones.

Life insurance is a crucial aspect of any financial plan, and provides peace of mind that your family will be financially protected if you were to pass away unexpectedly. In this blog, we’ll explore why life insurance is important for pharmacists, what options are available, and how to choose the right coverage.

Why Get Life Insurance as a Pharmacist

Pharmacists need life insurance for a variety of reasons. Many Pharmacists have dependents or spouses that rely on their income and can benefit from coverage for end-of-life expenses or income replacement. Life insurance ensures that, in the event you were to pass away unexpectedly, your financial obligations will be met and that your family will have the funds to cover their needs. The main reasons pharmacists purchase life insurance in Canada include:

  • End-of-Life Expenses: When securing life insurance, it’s essential to account for the costs associated with funerals, memorials, and other end-of-life expenses. Adequate coverage can ease the financial burden on your family during an emotionally challenging period.

  • Future Financial Obligations: Consideration of future financial responsibilities, such as significant family milestones, ongoing mortgage payments, and the cost of a dependent’s education, is crucial. Life insurance can help ensure that these commitments are fulfilled no matter what.

  • Income Replacement: Life insurance can also provide financial support by replacing lost income in the event of the policyholder’s death. This is particularly vital if you are the breadwinner of your family, as it helps maintain your family’s standard of living by covering several years of expected income.

  • Retirement Savings: Certain life insurance policies with a cash value component can serve as a supplemental source of retirement income, offering financial flexibility during your golden years.

  • Corporate-Owned Life Insurance: For pharmacists who own an independent pharmacy, corporate-owned life insurance is a strategic tool you can use to ensure your business remains operational in the event of your death.

5 Reasons Pharmacists Need Life Insurance in Canada

Types of Life Insurance for Pharmacists in Canada

There are four options available to you if you’re interested in life insurance for pharmacists in Canada. Your coverage requirements and financial objectives will determine which policy is ideal for you, as each type of policy has specific benefits and features. The following are the main policy types you can choose from:

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Term Life Insurance

Term life insurance provides coverage for a specified period, typically ranging from 5 to 20 years. It’s a popular choice for pharmacists seeking affordable protection to cover specific needs like mortgage payments, children’s education, or other time-sensitive financial obligations. The premiums are generally lower compared to other policies, making it an accessible option for those looking for temporary coverage.

Term life insurance has the following benefits:

  • Typically the most affordable option.
  • 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.

Monthly Term Life Insurance Rates for Canadian Professionals

Permanent Life Insurance

Permanent life insurance, as the name suggests, provides coverage for the entire lifetime of the policyholder, unlike term life insurance which only covers a specified period. There are two primary types of permanent life insurance: whole life and universal life. Both offer lifelong protection, but they differ in how the cash value component grows and is managed. Whole life insurance offers a cash value component that grows at a fixed rate, with premiums that remain level throughout the policyholder’s life whereas universal life insurance allows the policyholder to adjust the premiums and death benefit, and the cash value growth depends on the performance of the investments chosen by the policyholder.

Permanent life insurance has the following benefits:

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.

Monthly Universal Life Insurance Rates for Canadian Professionals

No Medical Life Insurance

While more expensive, no medical life insurance offers coverage to Canadians who may face challenges in qualifying for standard life insurance due to health issues. Unlike traditional life insurance policies, no medical life insurance does not require medical underwriting, making it an attractive option for those with disabilities or medical conditions that could affect eligibility or premium rates. Conditions such as mental health issues, a history of heart attack or stroke, back problems, and other common health concerns among pharmacists can make obtaining standard life insurance difficult or costly.

No medical life insurance has the following benefits:

  • 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.

Monthly No Medical Life Insurance Rates for Canadian Professionals

Life Insurance Through Workplace Benefits or a Pharmacists Associations

In Canada you may be able to benefit from life insurance through workplace benefits offered by your employer or through a pharmacists association. Many workplace’s will offer group life insurance coverage which can be useful for simple, straightforward coverage. There are also pharmacist associations such as the Ontario Pharmacists Association (OPA) that offer 10-year term life insurance coverage.

However, it’s important to know that plans offered through an association or workplace benefits are often less flexible, have set minimum and maximum coverage amounts, don’t typically offer permanent coverage, and are only offered through a specified provider. By selecting an individual policy you get the chance to be more selective and compare premium costs, perks, and coverage options between any of the top Canadian life insurance providers. This will allow you to shop around and choose the plan that best meets your particular needs.

Corporate Owned Life Insurance for an Independent Pharmacy

If you own a pharmacy, a corporate-owned life insurance (COLI) policy can provide significant benefits to your business. This type of policy is owned by the business and covers the life of any key employees, often the owner and any other pharmacists who are essential to the pharmacy’s operations.

Your business pays the premiums for the policy and is listed as the beneficiary. If a covered individual passes away, your business will receive a tax-free death benefit. This benefit can be used to mitigate any financial loss caused by the death of the key employee and to cover the costs of hiring and training a replacement.

Additionally, COLI policies come with a cash value component that grows at a fixed rate. The cash value can be used to fund retirement benefits for key employees. Your pharmacy can access this cash value for various purposes, such as investing, covering operational expenses, or supporting business growth initiatives.

Benefits of COLI for an Independent Pharmacy:

  • Financial Protection: Mitigates the financial impact of losing a partner or key employee by covering hiring and training costs for a replacement.

  • Cash Value Accumulation: The cash value grows over time at a fixed rate, providing a resource for retirement benefits, investment, operational costs, and business growth.

  • Tax Advantages: The death benefit received by the farm is tax-free, and the cash value component grows tax-deferred.

Advantages of Corporate Owned Life Insurance

Case Study Example

Dr. Anjali Patel is a 42-year-old pharmacist working in a busy community pharmacy in Toronto. As a healthcare professional, she understands the importance of planning for the future and is particularly interested in securing permanent life insurance coverage to help protect her family’s future.

Case Study Life Insurance for Pharmacists

Anjali considers the following factors when assessing her life insurance needs:

  • Anjali and her husband have $350,000 remaining on their mortgage, which they plan to pay off in 15 years.
  • She has two children, ages 10 and 7, and wants to ensure they have funds available for their post-secondary education or future life goals. She estimates that $100,000 will be needed for this purpose.
  • She also wants to contribute to her and her husband’s retirement savings, aiming to leave behind $150,000 to supplement their retirement fund.

After evaluating these needs, Anjali determines that she will require a total of $600,000 in life insurance coverage to achieve her financial goals.

Anjali discusses her options with a life insurance broker who explains that a whole life insurance policy would offer her lifelong coverage at a fixed rate and the opportunity to build a cash value, which could be used for future financial needs or as part of her retirement strategy.

Since Anjali is in excellent health, with no pre-existing conditions or family history of serious illnesses she applies and qualifies for a standard whole life insurance policy with $600,000 in coverage. The policy comes with fixed premiums that will not increase over time, and a cash value amount that will grow at a guaranteed rate, providing Anjali and her family with additional financial security.

Frequently Asked Questions (FAQs) about Life Insurance for Pharmacists in Canada

Pharmacists can benefit from term life insurance if they are interested in affordable, high-coverage protection during their peak earning years or permanent life insurance, such as whole life or universal life, which builds cash value and can serve as a financial tool for retirement planning.

If you retire, you may have the option to continue your life insurance policy, convert it to a personal policy, or use the accumulated cash value for retirement income. If you sell your pharmacy, ownership of a corporate-owned policy can be transferred, or the policy may be cashed out or adjusted.

Canada is fortunate to have many established and trustworthy insurance providers to choose from. Often, which insurer is best depends on what type of coverage you are interested in. For example, Manulife Financial and TD Insurance are both great options for permanent life insurance with comprehensive investment options. Canada Protection Plan and Assumption Life are great options for no medical life insurance. If you aren’t sure which insurer to choose, here is a comprehensive list of the best life insurance companies in Canada.

Find a solution that’s right for you.

With so many options available, it can be difficult trying to figure out which option is best for you and your family. That’s why we work directly with clients to offer expert advice and help with every step of the life insurance process. 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 Mississauga, Victoria, Red Deer, and Portage la Prairie.

Want to learn more about your options?

Contact us today to discover which life insurance policy is right for you!

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