Where to buy personal insurance

Cost is always a concern, but insurance advice is often more important than insurance price.

3 ways to buy insurance

  1. In person from a licensed insurance agentInsurance agent A person who is trained and licensed to give expert advice and sell insurance. Some get extra training so that they can also sell investments. They get paid by the companies whose products they sell.+ read full definition or brokerBroker A registered person who brings together someone who wants to buy investments with someone who wants to sell. Brokers often charge a fee or commission for buying and selling investments for you.+ read full definition
  2. Online or by phone from a broker or insurance companyInsurance company A company that sells insurance products. Some companies sell only life insurance. Some sell only property insurance. Others sell all types of insurance.+ read full definition
  3. A financial advisor who is licensed to sell insurance

Some investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition firms may also have a licensed broker on staff who can provide you with personal insurance advice and coverage.

Get advice

You might be able to get a cheaper insurance quote online, but advice is critical. You or your family could suffer financially if you are under-insured.

Find an advisor or agent that you trustTrust An account set up to hold assets for a beneficiary. A trustee manages the assets until the beneficiary reaches legal age.+ read full definition, and then get their advice on what types of insurance you need – and how much to buy. Be open about how much you can afford.

In most cases, the cost of the advice is built into the commission they earn on the sale of insurance to you.

Broker or agent: What’s the difference?

  • Some life insuranceLife Insurance Insurance that pays cash to your family or other beneficiary after your death. This can give them income and help pay your funeral and other final costs.+ read full definition agents work for just one insurance company.
  • Other life insurance agents work for insurance brokers who can quote prices and tell you about products from a number of insurance companies.
  • All licensed agents are trained to assess your insurance needs and must follow a code of ethics that puts your insurance needs first.
Confirm if your agent is licensed

In Ontario, personal insurance agents are licensed by the Financial Services Authority of Ontario formerly the Financial Services Commission of Ontario (FSCO). Most other provinces have a similar licensing body. You can confirm your agent’s licensing by doing a search.

5 questions to ask before you buy insurance

  1. How does this policy meet your needs? Find out what it covers and what it leaves out.
  2. What does it cost? Ask how much the premiums are and how often you’ll pay them. Are you getting the best rate the insurance company offers? If not, ask why.
  3. Will your premiums change? Some don’t change, but others change each year or every few years. Your premiums may also change if your health changes.
  4. How long does the policy last? Some insurance renews each year. Depending on the policy, life insurance can last for a set number of years or for life.
  5. Does the policy let you build savings? If it does, your advisor may show you examples of how your money could grow over time. Ask how they worked out their examples. Ask to see how these examples would change if interest rates change, or if your investments don’t perform as well as your advisor expects.

5 questions to ask

  1. Why should you buy this policy?
  2. What does it cost?
  3. Will the premiums change?
  4. How long will it last?
  5. Can you use it to build savings?
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