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Life insurance isn’t a legal requirement, but it does offer some comfort that your family will be taken care of, financially, if you pass away. Your loved ones can use the lump-sum payout to cover lost income, pay off debt, and take care of future expenses.
If you are considering getting life insurance for the first time, you may have heard about Cover Direct. While it may sound great on the surface, there's more than meets the eye.
Read our in-depth review of Cover Direct life insurance to find out its key features, pros and cons, and more importantly, if it is the right fit for you.
Key Takeaways:
- Cover Direct’s main life insurance product is yearly renewable coverage (your rate goes up every year, forever)
- Get approved with only a few health and lifestyle questions (no medicals or blood tests required)
- Coverage options are between $100,000 and $1.5 million, depending on your age
- Two optional coverage available: critical illness insurance and children’s coverage
- Includes terminal illness coverage, which provides access to the full death benefit amount in the event of a terminal illness
Pros and Cons of Cover Direct Life Insurance
Key Facts about Cover Direct
Cover Direct is the insurance arm of Neilson Financial Services in Canada and headquartered in Alberta. Their insurance policies are underwritten by Canadian Premier Life Insurance.
Cover Direct offers up to $1.5 million of life insurance cover. You can only purchase their life insurance products directly through them, not through any other broker.
Cover Direct plans are also not yet available in Quebec.
Types of Life Insurance Cover Direct Offers
Cover Direct offers two types of coverage: age-based and level-premium. Let’s find out more about them.
1. Age-based Coverage
With age-based coverage, your premium rate increases on an annual basis. You can renew the policy each year until you choose to terminate it or passes. In other words, you can can get coverage anywhere from 1 year to until your death.
Age-based renewal plans are available to Canadians aged 18 to 65. Since Cover Direct follows simplified underwriting, you don’t have to undergo a medical exam. Instead, you can get cover with minimal health questions.
Cover Direct’s age-based coverage lets you increase or decrease the death benefit, within set limits, if your circumstances change. It also lets you invest a portion of each premium payment into a built-in account where it can grow over time, just like whole life insurance.
May be good for
Yearly renewable policies may be a right option for those who need insurance coverage for a short period of time. Say, your earlier coverage is expiring, but you still need insurance protection for another two or three years.
Other common scenarios in which you may want age-based coverage are:
- You have a short-term debt that you want to cover
- You need insurance protection right away but are working on your health to improve your chances of qualifying for a level-based term life plan at affordable rates
- Your budget is limited now and want a low-cost term life plan until your circumstances change
May not be good for
Yearly renewable term insurance is not be suitable for long-term needs, as your premiums increase every year.
Don't be fooled by the lower rates! While you may only be paying $30/month today, your rate can quickly increase to $100/month (or more) in just a few years.
So, if you want to put a plan in place until you pay off the mortgage, which will take least 18 years, a 20- or 25-year term life policy is a better option.
2. Level-premium coverage
If you have a long-term, but not permanent, financial need, a level-premium term life insurance might be ideal for you. Your monthly premium remains the same throughout, and you can match the length of the policy term to your biggest financial obligation to ensure you won’t have to pay for coverage you don’t really need.
Cover Direct offers level-premium term life insurance for coverage amounts $100,000 to $1.5 million. Term length options vary from a 10-year to 30-year term.
May be good for
- People who want insurance to cover long-term needs, such as their mortgage or the years until their children become financially independent or they retire.
- People who an affordable term life insurance plan without having to undergo a medical exam
May not be good for
- People who are looking for the most coverage at the best price (it pays to shop around different insurance agencies)
- Applicants with lifelong dependents, e.g. parents of a special needs child
- People who plan to use insurance as an investment tool
- People who want to use insurance to pay for their funeral and end-of-life expenses
What riders are offered by Cover Direct?
Insurance riders provide additional coverage and added protection against risk, usually at an additional cost. Cover Direct offers two paid add-ons: critical illness insurance and children’s coverage. Along with them, it offers the terminal illness rider at no addition cost.
1. Critical Illness Insurance
Critical illness care includes expenses that often go beyond what a traditional health insurance plan covers. Without critical illness insurance, you’ll be paying for these costs, which can easily run into several thousands of dollars, out-of-pocket in the event of a serious illness.
Cover Direct’s critical illness insurance provides financial assistance when you need it most, allowing you to access quality healthcare services and focus completely on recovery. Key features of this rider include:
- Covers four of the most common critical illnesses: cancer, stroke, heart attack, and coronary artery bypass surgery
- Pays a tax-free, lump sum of $50,000 if you are diagnosed with a covered condition
2. Children’s Coverage
If you want to insure your children, a children’s coverage rider is usually a better option than a stand-alone plan for them. The Cover Direct’s child rider covers your biological, adopted, or step children until age 21. It pays a fixed cash benefit if your child dies from accident-related injuries or is diagnosed with certain conditions, such as bacterial meningitis, permanent blindness, total paralysis, or encephalitis.
3. Terminal illness rider
Terminal illness rider is included with both the plans. It gives you access to up to 100% of the death benefit if you are diagnosed with a terminal illness. In contrast, most other Canadian insurers issue not more than 50% of the insured sum in the event of a terminal illness diagnosis.
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How much does Cover Direct life insurance cost?
Cover Direct life insurance can cost as little as $9.66 per month (most people pay significantly more, don't be fooled by the low number). Like any kind of insurance policy, how much you will pay for coverage depends on how likely you are to file a claim. The higher the chances of your making a claim, the costly the premiums.
With life insurance, your age, health, and lifestyle choices are the main factors that determine how risky you are. Policy-specific details, like the kind of insurance policy you buy and the benefit amount also impact your premium rate.
Here’s a look at how life insurance pricing works.
- Type of life insurance policy
Cover Direct offers two types of insurance plans: yearly-renewable and level-premium. With a yearly-renewable plan, your monthly premium can increase every year. In contrast, a level-premium policy requires you to pay the same monthly premium throughout the policy term. Since with yearly-renewable coverage, the insurer reserves the right to review your premium rate every year, its initial cost is cheaper than a comparable level-premium plan. However, over time, it could become more costly, which is the main reason why experts recommend yearly-renewable insurance only for short-term needs.
- Personal details
No two individuals with the same policy will pay the same premium rate, because many personal factors affect the cost.
For example, insurance is more expensive for a person who buys a policy in their fifties than someone in their early thirties because they’re, statistically speaking, more likely to develop health complications. By the same logic, smokers pay more for coverage than non-smokers, and someone with pre-existing illnesses will likely receive higher premiums than a healthy person.
- Coverage amount
The higher the coverage amount, the more expensive the premiums.
Because so much of the insurance cost is based on personal factors, it is not possible to give an exact price quote without knowing your personal circumstances. Speak to one of our advisor to get a personalized quote based on your personal and coverage details.
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Find the best rates
How do you get a quote from Cover Direct?
Interested in buying Cover Direct life insurance? Contact Cover Direct via their website or by calling 1-844-990-4228.
Conclusion – Is Cover Direct a Good Choice for Life Insurance?
Cover Direct’s yearly renewable plan can be a good choice for someone who quickly needs life insurance cover for a short period. Unlike many insurance providers, Cover Direct has a super-fast application process and applicants can get approved with just a few health questions.
Its level term life insurance plan, in contrast, is worth considering if you want coverage that lasts for the next 10, 20, or 30 years. Your monthly premium rate will remain the same throughout the duration of the policy term, so you don’t have to worry about your insurance costs increasing every year.
However, regardless of the type of insurance cover you are seeking, it’s best to shop around because premiums vary greatly depending on your personal circumstances. Dundas Life, one of Canada’s top rated insurance advisors, work with dozens of Canadian insurance agencies, to find you the most affordable plan. Simply get in touch for your personalized, free, and no-obligation price quotes.
FAQs
Does Cover Direct life insurance cover includes accidental death coverage?
Cover Direct offers the accidental death benefit rider as an additional rider with its Family Life Insurance plan. It provides an extra payout in the event of death due to an accident.
Who can apply for Cover Direct Life Insurance?
To apply for Cover Direct life insurance, you must be a Canadian resident aged 18-70. Cover Direct plans are not yet available in Quebec.
Does Cover Direct Life Insurance require a medical exam?
Cover Direct doesn’t require you to undergo a medical exam. You can approved with just a few health and lifestyle questions.
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