A person's state of health and their lifestyle are always taken into consideration.
Emmanuelle Bertrand | Journalist
When you're looking to take out life insurance, it's only natural to wonder how your eligibility and the premium you'll pay are determined. Patrick F. Bouchard, an advisor with Desjardins, sheds some light on the topic.
A person's state of health and their lifestyle are always taken into consideration: "If you play an extreme sport, or you're a bush pilot, the insurance company is going to spend a little more time on your application," explains Bouchard.
Here are the factors insurance companies usually consider:
"The more insurance you're applying for, the more questions you'll be asked," he adds, "because the insurance company will want to know what risk you represent." Bouchard says it's possible to make large-scale savings on the amount of insurance: "That's why the insurance premium on $100,000 may be only slightly less than the premium on $90,000." Another interesting fact: there are generally no fees to pay outside of the premium and taxes.
Before you sign
Before taking out the insurance, consider these 6 tips from our expert:
1.Think about what you actually
a.What do you want to leave your
heirs (children, spouse)?
b.Are you saving up for your
children's education? Think about putting aside a certain amount in the event of
c.What property and assets do you
want to cover?
d.Do you want to insure an
additional family member or a business associate?
e.Do you want to make a donation
upon your death?
2.Deal only with an advisor you
trust--they should be able to answer all your questions.
3.Don't shop around with only the
price in mind; think about the product's features, too. There are lots of
options out there, and some will be better suited to your specific needs.
4.Think about getting life
insurance outside what you have with your employer. The insurance you get
through work is meant to cover general needs and can be reduced by close to 90%
after retirement age.
5.Be honest when you answer the
insurer's questions--it's the best way to avoid headaches down the road!
 I.e., alcohol and drug use, extreme sports,