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My benefits through my employer are up for annual renewal.

My benefits include basic life insurance of 1x my annual salary ($107K). I have the option to purchase additional coverage up to 5x my salary. If I do so, the cost per month would be $18.90 for $632K of coverage ($525000 + $107000). (the additional coverage only comes in units of $25K).

Now, I am an engineer, so I could get coverage through Manulife at what seems to be a slightly better rate: $17.02 / month for $650K in coverage according to their online quote calculator.

1) So obviously, Manulife is a bit cheaper, which is a plus. Does anyone here deal with them? Are they reputable?

2) If I leave my company, I suppose my worry would be that I would lose coverage right? Then I would have to get new coverage at a more advanced age - which would probably cost more? This obviously seems like a big limitation / downside right?

3) is there anything else I am missing? Other options I should consider?
 

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I might be inclined to go with Manulife if only because it is independent of your employer. If you are in good health now is the time to do it. A few years from now you could be consulting, work for a firm that does not offer this benefit AND you could have developed a medical condition that negatively impacts your ability to get term insurance at a good price.

When I had term, our company insured us for 2X salary. We had the ability to buy another 5X salary at a very, very low rate. I went for the max because I had small children. Some fellow employees thought that I was nuts. Sure enough, five years on the company cut back on how much additional term one could by, or at least the carrier did. There were a number of ees that were sorry that they did not purchase the max when they had a chance. They also brought in a medical questionnaire that was not present when I first signed up.
 

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I might be inclined to go with Manulife if only because it is independent of your employer. If you are in good health now is the time to do it. A few years from now you could be consulting, work for a firm that does not offer this benefit AND you could have developed a medical condition that negatively impacts your ability to get term insurance at a good price.

When I had term, our company insured us for 2X salary. We had the ability to buy another 5X salary at a very, very low rate. I went for the max because I had small children. Some fellow employees thought that I was nuts. Sure enough, five years on the company cut back on how much additional term one could by, or at least the carrier did. There were a number of ees that were sorry that they did not purchase the max when they had a chance. They also brought in a medical questionnaire that was not present when I first signed up.
$500,000 coverage for 20 year old is about $1000 / year. The same coverage becomes $4000 / year when you reach 40. You should lock in your rate now. Also, if you are diagnosed with diabetes or neuromuscular disorder, you may be totally uninsurable, no matter how much more you are willing to pay.

There is no guarantee that anyone cannot be diagnosed with something horrible in the future. If you have dependents or plan to have some, please do not wait to take that chance.
 

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I think those prices are high. I just ran a test on Term4sale.ca (no affiliation) and the cheapest is $260/year for 500k 10-year term, or $450/year for 500k 20-year term for a female 41-year-old. For a male 41-year-old it rises to $615/year for the 500k 20-year.
 

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You've not included two important considerations in your comparison of premiums - guarantees, and duration.

Your work coverage premium is guaranteed for exactly one year. There's no assurance what the premiums will be next year or 5 years from now. However even if they do stick with projected premiums, the premiums will only be level for 5 years. Group coverage premiums are projected to increase every 5 years of age, at age 30,35, 40, etc.

Your engineering association coverage probably has the same drawbacks. Premiums generally are not guaranteed, and they are generally a 5 year term.

So the third product you should compare, as fraser noted, is from a broker. They'll quote you on products that are both guaranteed and level for 10,20 or 30 years. And these term products have an option to convert to permanent lifetime coverage if you become uninsurable.

So you should be comparing premiums over time, not first year premiums. Then looking at the diffference over time and determining if any increased cost is worth the guarantee over longer time periods. Though the older you are, the better individual term life insurance compares to group work coverage. It's entirely possible that getting the long term guarantees of a term policy is actually competitive to your group coverage.

My next comment - why are you letting what the company offer you dictate how much coverage you get? I suggest doing your own calculation. and going from there.

Last comment :) - Engineers I work with frequently end up with with I call an 'actuaries' policy' or a layered policy. Something like a layer of 20 year level coverage,and a layer of 10 year coverage. The idea is that you need less coverage over time, and that layering of two types of coverage is the least expensive way to do that over time. The rest of the world just buys a 20 year term policy :).

Get an online quote on line from a broker..you will get rates from different insurers/banks for term 10, 20, etc.
Thanks! Cheque's in the mail!
 
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