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How Do I Choose the Right Amount for My Life Insurance?

Montant pour mon assurance vie

While it is generally  recommended that you have life insurance coverage equal to ten times your annual salary, several factors should be considered when you are the amount of life insurance you need.

Before you make this important decision, we recommend that you choose your type of life insurance and be familiar with how life insurance works.

To choose the right amount for your life insurance:

Think about your current and future needs

Ask yourself: How will my life insurance amount be used and who will need it? This question that will allow you to estimate the amount of your insurance coverage.

Things to consider when determining your life insurance needs:

  • Your annual income
  • Your net worth
  • Your debts
  • Your existing life insurance

To help you, inventory your debts, the amount needed to replace your salary, and any other items you might want to factor into your insurance, such as your children’s education fund, an amount for your funeral expenses, taxes on death for illiquid assets, etc.

Assess the monthly premium

First, assess the budget you can allocate to this type of insurance. Then choose the premium to be paid. Be aware that if you choose a large amount, your insurance premium will be high. The same applies to the duration of the contract. The longer you’re insured, the higher the price. Think about it. If you stop paying the premium or if your situation no longer allows you to do so, you will no longer be insured after your grace period, which is generally 30 days.

The monthly price can vary significantly. There are many things that insurers take into account when you apply for insurance, but your age is an important factor. Since you are less likely to die at a young age, insurance is less expensive for young people. So getting insurance early in your career is beneficial.

Most types of insurance take into account your age, tobacco use and lifestyle. When comparing life insurance prices (which you can do on the Matcha Insurance website), you will see large differences in premiums according to the age, gender and smoking status you choose.

Let’s explore a few cases to compare prices. Suppose six different people want to buy $250,000 life insurance for 10 years. They go to the Matcha Insurance premium comparator and enter their date of birth, their gender, and their smoking status as well as the amount of insurance they want. What they see as the average premium is:

Monthly premium Non-smoker

Monthly premium
Smoker

10-year term life insurance with $250,000 face value

Woman, 25 years old

Man, 25 years old

Woman, 50 years old

Man, 50 years old

Woman, 75 years old

Man, 75 years old

$11

14 $

$32

$43

$152 

$220 

$16 

$25

$76

$126 

$283 

$530

10-year term life insurance
with $250,000 face value

Monthly premium

Non-smoker

Smoker

Woman, 25 years old 

11 $

$16 

Man, 25 years old 

$14 

$25 

Woman, 50 years old 

$32 

$76 

Man, 50 years old 

$43 

$126 

Woman, 75 years old

$152 

$283 

Man, 75 years old 

$220 

$530 

As you can see, the same insurance will cost nearly three times as much for a 50-year old woman as for a 25-year-old woman. Furthermore, smoking status can almost double a person’s premium, regardless of age.

Still have questions about the life insurance offered by Matcha Insurance? Our financial security advisors are available to answer any questions you may have and to reassure you.

Contact us now by calling 1 844 532-3228 or Book an Appointment.

Consider your health and family history

Depending on the type of life insurance you want, you may be asked to do a medical exam or answer questions about your family history. The results will affect your insurance premium. That’s why you should always talk to an insurance expert at Matcha Insurance to obtain an evaluation of your profile and avoid a refusal.

If that’s your case, you could use simplified or guaranteed issue insurance. This means that you would not need to do a medical examination or complete a comprehensive questionnaire and you would be insured. You can do all of this by answering a few questions from one of our advisors. Life insurance included in a group insurance plan is also a good option to consider when assessing your coverage, as group characteristics—not personal characteristics—are considered when premiums are being set.

However, these types of simplified or guaranteed issue insurance may limit the amount of insurance you can choose. Evaluating your profile will help you understand why the premium can also be higher than insurance for the same amount that would require a medical examination.

The consulting service is a tool at your disposal

You can compare life insurance prices at any time on our premium comparison tool. We also invite you to contact our team to review your situation.

Our expert advisors’ mission is finding the best coverage among over a dozen insurers in a matter of minutes. In addition, Matcha Insurance’s advisors stand out for the transparency and quality of their attentive service, provided through a client-focused and empathetic approach. No matter what type of life insurance you want, our team members will direct you to a competitive insurance solution that meets your needs, which are just as real and unique as you.

On the same subject

How do I file a complaint?

  • In case of dissatisfaction, start by getting in touch with our Director of operations, Mrs Sylvie Chartrand:
    Mrs Sylvie Chartrand
    Director of operations :
    sylvie.chartrand@matchainsurance.ca
    Telephone : 1 844 532-3228
  • If you are not satisfied with her response, you can contact our Complaints officer to make a formal complaint:
    Mr. Jean-Patrice Dozois
    Assistant Vice-President, Legal Affairs & Compliance
    1705-625, Avenue President-Kennedy
    Montreal (Québec) H3A 1K2
    Email: jean-patrice.dozois@humania.ca
    Telephone: 1-800-363-1334 or from Montreal: 514-485-1334, ext. 307
    Fax: 1-844-773-4999

The complaint must be filed in writing. If you need help filing your complaint, you may call Ms. Marie-Kim Larouche, Legal advisor, at 1-800-363-1334 ext. 479.

Any complaint made in writing to our Complaints officer will be recorded in Matcha Insurance’s complaints registry if it includes at least one of the following:

  • A reproach against Matcha Insurance;
  • The identification of real or potential harm that a consumer has sustained or may sustain; or
  • A request for remedial action.

A complaint file is opened for each complaint. The file includes all of the documents required to assess your complaint.