Page 50 - A Canuck's Guide to Financial Literacy 2020

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Joint Life Insurance

Joint life insurance is an insurance policy usually between spouses or business partners. It
is less costly to buy joint life insurance policy instead of two separate policy. This type of
policy is less costly but the death benefit is usually paid on "first to die". However, there are
insurance companies that provide "last to die" policies for estate planning.

Group Life Insurance

Group life insurance is a type of life insurance contract where a single contract covers an
entire group of people. The policy owner is usually an employer or an entity such as a
union. The policy is issued without medical examination and is set up for the benefit of the
employees. Premiums on group life insurance policies are lower than individually owned
policies. Group life insurance policies have less features and choices in comparison to the
individual life insurance which is why it's important to review your group insurance.

Factors Affecting Premiums

Factors that affect the life insurance premium is based on a number of things. Below we'll
highlight the most common considerations.

• Age - the older you are, the higher the premium would be
• Gender - historically women live longer.
• Smoking Status - this could involve cigarettes or marijuana.
• Rating - certain individuals may pay higher premiums if their risk rating level is high.
Example - 40-year-old man with diabetes.
• Family Health History - taking a look at the family health.
• Hobbies - individuals who have high risk hobbies such as skydiving may pay higher
rates.
Occupation - Pilots are considered riskier than office workers.
Policy Riders - adding certain policy riders could increase your life insurance
premiums.

Calculating Life Insurance Premiums

When an insurance company calculates how much your monthly premium would be, they
take various things into account such as your mortality cost, their administrative expenses
plus their investment returns. The formula is