What does life insurance cover?

What does life insurance cover?

Life insurance is an agreement between a person and an insurance provider that provides a tax-free, lump sum benefit to a designated beneficiary or the estate of the insured person upon their death if a beneficiary isn't named. The insured person or the policy holder pays a certain amount periodically for this coverage which is referred to as the premium. There are several types of insurance plans, and an individual can decide which plan is best for them based on their respective needs. The insurance benefit could be used however they wish, whether for replacing lost income, helping with mortgage payments, or paying for education. Generally, the younger and healthier you are, the lower the premium will be. 

Does life insurance cover natural death?

Death due to natural or accidental causes are covered by life insurance depending on the policy you own. Be it old age or fatal illness, the designated beneficiaries receive the insurance payout as stated in the insurance policy.

Does life insurance cover unnatural death?

Unnatural deaths are covered by life insurance, depending on the policy you own. For example, the life insurance policy can pay out a death benefit to the designated beneficiaries if an insured person passes away due to an accident such as a motor vehicle accident, drowning, etc.

Life insurance is meant to provide coverage should you pass away whether it be due to natural causes, accident or illness. There are, however, circumstances such as fraud or committing suicide within 2 years of the policy issue date, when a policy will not payout. For a detailed list of exclusions, it is always good to check with your life insurance company.

What type of expenses can a life insurance payout be used for?

The beneficiary of a life insurance policy can use the payout for whatever they choose. A person's family could be faced with financial obligations after the insured passes away. The death benefit payout can be used for funeral costs, mortgage payments and other debts, coverage of the family's day to day expenses, a child's education, and more.

What happens if someone passes away shortly after getting life insurance coverage?

If the insured person meets the conditions of the policy (provided the application has been accepted) the death benefit will pay out as long as the claim is approved. The beneficiary needs to submit a claims application to the insurer in order to start the claims process. For this reason, it is important the beneficiary is made aware of the policy’s existence.

Does life insurance expire?

Some life insurance policies expire after a certain period, while others don’t. With term life insurance, the policy will expire after a specified term or once the person insured reaches the age limit. With permanent life insurance, the policy will remain active as long as the insured person lives, and the required premiums are paid. 

At TD Insurance, policies that expire include: 

TD 10-Year Term Life Insurance and

TD 20-Year Term Life Insurance

Which renew automatically at the end of each 10 or 20-year term, respectively, and expire when the insured person reaches 80 years of age.

On the other hand, our TD Term to 100 Life Insurance lasts for an insured person's lifetime.

What's not covered: exclusions and limitations  

Knowing what's not covered in a life insurance policy can be helpful. The things your life insurance policy does not cover are known as exclusions. Examples of policy exclusions could include suicide within the first two years of the policy issuance, travel to war-torn areas, illegal activities, and fraud. To understand the exclusions specific to your policy, speak with your insurance provider. You can also refer to the list of exclusions in your life insurance policy.

When should you get life insurance?

The right time to get life insurance can be different for different people. When considering life insurance, one factor to consider is whether you have dependents or others who rely on you for their financial security. Some people inquire about life insurance during major life events, such as:

There are several factors to consider for purchasing life insurance at a young age. You could pay less for the same life insurance coverage when you are younger. This means that you can get the same amount of insurance coverage at a lower cost compared to when you’re older.

A life insurance policy helps your family or designated beneficiaries to financially support themselves should you pass away. It can help provide them with financial protection and avoid potential financial hardship.

Life insurance at TD Insurance

At TD Insurance, we believe life insurance doesn't need to be complicated. The TD Life Insurance Calculator can help you see how much life insurance you may need. If you're ready to get started -for a life insurance coverage, visit us for an online quote.