Life insurance for medical residents in Canada

As a resident doctor in Canada, you’re at the start of a rewarding but demanding career. While you’re focused on developing your medical skills and caring for patients, it’s crucial not to overlook the importance of financial planning. Life insurance is a fundamental part of this plan, offering financial security for your loved ones and peace of mind for you. In this blog, we’ve explored life insurance for medical residents and have explained the types of life insurance options available, how much coverage is necessary, and tips for choosing the right policy.

Benefits of life insurance for residents 

Like any other medical professional, resident doctors need life insurance to provide a financial security net for their families. Some of the other reasons why resident doctors need a life insurance policy are:

Understanding the types of life insurance in Canada

There are two major types of life insurance policies in Canada: term life insurance and permanent life insurance. Choosing the right kind of life insurance policy is essential to meet your requirements as a young resident doctor. 

Term life insurance lasts for a specific period of time or “term” that usually varies between five to 50 years and some insurers let you customize the length of your term. Term life insurance is also the most affordable type of insurance. 

The flexibility that term life insurance offers along with its affordability, makes it an ideal life insurance option for resident doctors in Canada. It offers high coverage at lower costs, allowing you to get life insurance protection and manage your student loan debts plus other expenses you may have.  

Read more about when to buy term life insurance  

Permanent life insurance lasts for your whole life and is useful for long-term needs like covering estate taxes, final expenses, and more. 

There are three types of permanent life insurance policies:

1. Whole life insurance covers you for your entire life and allows you to access a part of the death benefit as cash value during your life
2. Universal life insurance is similar to whole life insurance, except you control the investment options yourself 
3. Term-to-100 life insurance requires you to pay the premiums till your 100th birthday and get lifelong coverage 

Learn more about the types of life insurance 

When should resident doctors purchase life insurance?

We recommend coinciding your life insurance purchase with the following key life events:

1. Beginning of residency: Younger and healthier individuals get better premium rates with limited or no underwriting while buying a life insurance policy. Graduating from medical school and starting residency is the ideal time to get lower insurance premiums
2. Marriage or a long-term relationship: Once you are married or in a relationship, you should get life insurance to protect your partner in the unfortunate event of your demise. This is especially helpful if you have medical student loans—your life insurance policy will prevent the burden of the loans from falling on your partner
3. Starting a family: If you have children or have bought a house, your life insurance policy can cover future education and mortgage expenses, respectively

Timing is everything when it comes to buying life insurance. It can often be frustrating. No one wants to buy coverage they don’t need, especially young residents who are just starting their careers. However, the peace of mind that comes with a life insurance policy far outweighs the costs. 

Do resident doctors need life insurance if they are covered by their employer?

As a resident doctor, you might have some life insurance coverage from your place of work. Relying solely on employer-sponsored life insurance may not be enough due to the following reasons: 

• Limited coverage — Life insurance that is offered by your employer is usually based on your income. You might get one or two times your annual income as coverage. This is not always enough to cover your debt, family’s needs, and future obligations
• Lack of portability — Any life insurance offered by your employer will end with your employment. Having your own life insurance policy will ensure you have continuous coverage
• Insufficient customization — Most employer-offered life insurance policies are one-size-fits-all and are not customized to an individual’s needs. A personal life insurance policy will be tailored to suit your financial situation and requirements

Know more about the cost of life insurance in Canada

Common misconceptions about life insurance for residents

There are several misconceptions about life insurance that our advisors hear about all the time. Let’s bust some of those.

Choosing the right life insurance policy

With your busy medical residency life it can be overwhelming to think about buying life insurance. You should assess your financial situation and goals and think about how much coverage you need. 

Unsure of where to begin and how to go about this? Speak to our licensed advisors who will be happy to help you find the right type of life insurance for yourself.