Financial Concepts
Plain-English explanations of the insurance and investment terms that come up most when planning your coverage - no jargon, just what each term actually means and how it affects you.
Insurance Basics
Premium
The amount you pay - usually monthly or annually - to keep an insurance policy active. Premiums are based on factors like your age, health, coverage amount, and the type of policy.
Deductible
The amount you agree to pay out of pocket before your insurance coverage starts paying. Choosing a higher deductible usually lowers your premium, since you're taking on more of the initial cost yourself.
Underwriting
The process an insurer uses to assess your risk - reviewing your health, age, occupation, and other factors - to decide whether to offer coverage and at what price.
Beneficiary
The person or people you name to receive the payout from your life insurance policy if you pass away. You can usually name more than one and update your beneficiaries at any time.
Term vs. Permanent Life Insurance
Term life insurance covers you for a set period (like 10, 20, or 30 years) at a lower cost. Permanent life insurance (whole or universal) lasts your entire life and can build cash value, at a higher premium.
Read our Life Insurance guide →Personal Insurance
Critical Illness Insurance
Pays a tax-free lump sum if you're diagnosed with a serious condition covered by your policy - such as cancer, heart attack, or stroke - regardless of whether you're still able to work.
Read our Critical Illness Insurance guide →Disability Insurance
Replaces a portion of your income - typically 60-70% - on an ongoing basis if an illness or injury prevents you from working, for as long as you remain unable to work under the policy's terms.
Read our Disability Insurance guide →Guaranteed Issue Life Insurance
A life insurance policy with no medical exam or health questions, so it can't be declined based on health. Coverage amounts are lower and premiums are higher than standard policies, making it an option when standard underwriting isn't a fit.
Explore Guaranteed Issue Life Insurance →Personal Investments
RRSP (Registered Retirement Savings Plan)
A registered account where contributions are tax-deductible and investment growth is tax-deferred until you withdraw the funds, typically in retirement when your tax bracket may be lower.
Explore RRSPs →TFSA (Tax-Free Savings Account)
A registered account where contributions aren't tax-deductible, but all investment growth and withdrawals are completely tax-free. Available to any Canadian resident 18 or older.
Explore TFSAs →RESP (Registered Education Savings Plan)
A registered account for saving toward a child's post-secondary education. The government adds matching grants (like the CESG) on top of your contributions, and growth is tax-deferred until withdrawal.
Explore RESPs →FHSA (First Home Savings Account)
A registered account combining the tax-deductible contributions of an RRSP with the tax-free withdrawals of a TFSA, but only for a qualifying first home purchase.
Explore FHSAs →Contribution Room
The maximum amount you're allowed to contribute to a registered account (RRSP, TFSA, FHSA, or RESP) in a given year, based on government limits and any unused room carried forward from previous years.
Corporate Strategies
Corporate-Owned Life Insurance (COLI)
A life insurance policy purchased and owned by a corporation, usually on a key person such as an owner or executive. The tax-free death benefit can fund a buy-sell agreement or be paid to shareholders as a tax-free capital dividend.
Explore Corporate-Owned Life Insurance →Insured Retirement Plan (IRP)
A strategy that uses a permanent life insurance policy's cash value - typically accessed through borrowing rather than withdrawal - as a tax-advantaged way to supplement retirement income for incorporated business owners.
Explore Insured Retirement Plans →Business Overhead Expense Insurance
Covers a business's fixed operating costs - like rent, utilities, and salaries - if an owner or key person becomes disabled and can't work, keeping the business running while they recover.
Explore Business Overhead Expense Insurance →Travel & Immigration
Super Visa Insurance
Mandatory medical insurance required for parents and grandparents applying for a Canadian Super Visa, requiring at least $100,000 CAD in coverage, valid for at least one year, from a Canadian or approved insurer.
Explore Super Visa Insurance →LICO (Low Income Cut-Off)
A government-set income threshold used to determine whether a Canadian sponsor's income is sufficient to sponsor a Super Visa application, based on family size. Sponsors generally need to meet LICO plus 30%.
Read our Super Visa guide →Visitor to Canada Insurance
Emergency medical insurance for tourists and temporary visitors to Canada, covering costs like hospitalization and emergency care that provincial health plans don't extend to non-residents.
Read our Visitor Insurance guide →Still Have Questions?
Our advisors can walk you through any of these concepts in the context of your own situation - no obligation, no jargon.
Talk to an Advisor