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Insurance can be an important investment for your physical health, financial security, and the welfare of your children and family. Though some types of insurance are mandatory, such as car and home insurance, there are other types that might slip your radar. Many types of insurance can be beneficial to individuals, families and businesses, and can offer financial protection that can save you from overspending on expenses and sometimes, even bankruptcy

Types of Insurances Available That are Undervalued

Apart from home and car insurance, there are many types of insurances that can be suitable for your lifestyle. Let’s take a look at the insurances available that sometimes get overlooked.

Disability Insurance

In 2017, Statistics Canada reported that 1 in 5 Canadians aged 15 or over had one or more disabilities, mostly related to pain, flexibility, mobility, and mental health. In many cases, having a disability can affect your ability to work and support yourself financially. Since one cannot certainly predict whether or not they will have a disability at some point in their life, disability insurance offers protection in the random event that you acquire a disability and cannot work. Disability insurance replaces a significant amount of your income in monthly payments if you become injured or ill to the point of it affecting your ability to work. 

Learn more about insurance and find out what type is right for you. 

Critical Illness Insurance

Similar to disability insurance, critical illness insurance offers you financial support if you become ill by way of a specific health event or illness. It differs from disability insurance in the way that the payment is made through a tax-free lump sum, rather than monthly payments to mimic your income. Critical illness insurance covers a variety of health issues, such as cancer, blindness, heart attack, and more, and can be used to cover the costs of treatment, rehabilitation, income replacement, house cleaning and more.

Thinking of buying insurance? Check out how to buy insurance online.

Car Rental Insurance

Rental car insurance protects you financially in the event of a collision. Specifically, this type of insurance can cover you and your passengers, damages to the car and your belongings, or damages to another person’s property or vehicle that occurred because of the collision. Although car rental insurance isn’t mandatory, it’s worth it to have it. You aren’t always able to account for any factors that can contribute to a collision or even a minor car accident. If you don’t purchase car insurance and someone rear-ends you, for example, you’re on the hook for the cost of damages.

Find out if your car insurance covers a friend driving your car.

It’s important to note that getting insurance directly from a car rental company can be the most expensive option. Other ways to find car rental insurance are through:

  • Your credit card
  • Your personal car insurance
  • Travel insurance
  • Banks
  • Other Insurance companies

Quick tip: Before purchasing any kind of car rental insurance, check your own insurance policy if you have a car. There is a chance that you might be covered under your own insurance policy. 

Check out why women pay lower for car insurance than men.

Travel Insurance

Travel insurance offers you financial protection in the event of various mishaps while travelling. This type of insurance covers the following:

  • Illness
  • missed flights
  • accidents and injuries
  • lost baggage
  • Death by accident (for your beneficiaries)
  • Evacuation

Although many Canadians are covered with provincial health plans, provincial coverage doesn’t usually apply to illnesses or injuries that happen abroad. Breaking your arm in the United States for example can cost you thousands of dollars if you don’t have health insurance. There are a few ways to obtain travel insurance, including:

Dental Insurance

According to the Canadian Dental Association, 32% of Canadians don’t have dental insurance, and ⅙ Canadians have a need for dental work but cannot afford to pay for it. Though many can find coverage through their employers or their post-secondary institution, many Canadians pay high costs to receive dental care. A check-up might cost around $100, but any more serious issues such as cavities, root canals, wisdom teeth removal, can cost hundreds and sometimes even thousands of dollars. Furthermore, it’s important to appreciate the overall health implications that come with oral health. Although bacteria in the mouth aren’t usually harmful to the rest of the body, poor dental health has been linked to many diseases, such as pneumonia, pregnancy complications, and cardiovascular disease. There are also a few health conditions that can, in turn, affect your oral health, including diabetes, HIV/AIDS, osteoporosis, and Alzheimer’s. Although everybody can benefit from a strong dental plan, people with these conditions might have an even greater benefit to having one. Moreover, individuals without coverage from their employer, because they are self-employed or retired, are also good candidates for dental insurance. 

Health Insurance

Health insurance functions similarly to dental insurance and is often offered as a joint package by many insurance companies. Health insurance covers the cost of medical expenses that aren’t covered by provincial plans, such as OHIP, for example. Some expenses that health insurance covers include:

  • Prescription drugs
  • Ambulance Services
  • Eye and vision care
  • Physiotherapy and Massage
  • Hospital Visits

Though many students and employees are offered health insurance through their institutions’ and employers’ group benefits plans, health insurance is an important financial safety net for individuals that are self-employed, losing their coverage, or retiring

Thinking about getting life insurance? Check out our list of the best life insurance providers in Canada.

Identity Theft Insurance

Have you ever received a call from the bank inquiring about recent credit card purchases? Sometimes, banks will reach out to their clients if they notice any spending that seems out of the ordinary. Typically it’s just an extra layer of safety, there are some instances where the unusual spending was the result of credit card fraud or theft, which is usually linked to identity theft. Identify theft takes place when someone obtains your personal information – credit card number, social insurance number, identification, etc.- and uses it to impersonate you to steal your money. Though many banks will recuperate most of the loss a victim of identity theft incurs (at least in their bank account), identity theft insurance helps cover the financial burden of time taken off work, lawyer fees, and other administrative fees that you may incur in getting your finances back in order. 

Do you think you’ve been a victim of fraud? Consider getting a credit fraud alert.

Best Insurance Providers in Canada

 Type of Life Insurance Availability Number of Partners
emma- Term life insurance
- Permanent life insurance
PolicyMe- Term life insurance
- Critical illness insurance
All of Canada-
Policy Advisor- Whole life insurance
- Term life insurance
- No medical life insurance
- Children’s life insurance
- Mortgage protection insurance
- Critical illness insurance
- Children’s critical illness insurance
- Disability insurance
BC, AB, MB, ON30 logo- Term life insurance
- Permanent life insurance
- Critical illness life insurance
BC, AB, SK, MB, ON, NB, NS50+
Insurance Hotline- Term life insurance
- Permanent life insurance
All of Canada30+

Factors to Consider When Buying Insurance

There are a few important factors to consider before pulling the trigger on an insurance plan. It’s important to evaluate all options to ensure the plan you are looking at is most suitable for your lifestyle and needs.

Obtain Quotes and Compare Plans

According to the Insurance Bureau of Canada (IBC), there are over 192 insurance providers operating in Canada, as of 2020. Who knows how many different insurance plans there are! It’s easy to be intimidated or confused, so it’s important to lay out all of your options before making a decision. You might want to consider an insurance broker to help you sort out all of your options, instead of purchasing an insurance plan directly. 

Don’t Buy More Than You Need

Insurance should offer you protection for any unforeseen events, not financially strain your life and bank account. Don’t buy too many different kinds of insurance, especially if they don’t directly make sense for your lifestyle. It’s best to start off simple – consider home and auto insurance first, then evaluate any other insurance needs you may develop a need for as the years progress. Remember, the mover coverage you have, the more costly it can be so it’s vital that you choose carefully. 

Find Our What’s Isn’t Covered in Your Policy 

Insurance helps you in many cases, but not all cases. That’s where the “exclusions” come into play. These are all the things your policy doesn’t cover, and you’ll want to be well informed of the exclusions before you decide on a plan. This way, you won’t be unpleasantly surprised if you find out you’re not covered in an area you assumed you would be. 

Consider Bundling Your Insurance 

If you have diverse insurance needs, you’ll likely shop for multiple types of coverage. For example, if you have two cars, own your own business, and have two children, you might consider auto, liability, business, and health insurance for both you and your family. This can add up to a lot of money leaving your bank account each month. Insurance providers know this too, and that’s why they sometimes offer bundled policies to provide their client with a better deal. Make sure to inquire with insurance companies about their bundled plans to help save costs.

Improve Your Credit Score 

Like a lender, an insurance provider wants to minimize their risk in supplying you with an insurance plan. If your credit score is poor, consider improving it as soon as possible before applying for an insurance plan. Low credit scores can contribute to a higher rate on your insurance plan.  

Final Thoughts

Illness, accidents, collisions, rotten teeth, business conflicts, identity theft, and travel incidents can happen to anyone. Falling into debt is often a result of any of the incidents listed above – picking out the best insurance plans for yourself and your family can help protect you from losing control of your finances. 

Chrissy Kapralos avatar on Loans Canada
Chrissy Kapralos

Chrissy is a Toronto-based communications advisor. With an English degree from the University of Toronto and editing courses under her belt from Ryerson University, she has continued her lifelong passion for writing and editing. In addition to working for Loans Canada on a variety of financial topics, Chrissy has a few years of resume writing and editing under her belt, and takes great pleasure in helping people find work that fits with their experience and passions. When she isn't working, you can find her practicing yoga, hanging out with her dog, reading up on financial and real estate news, or planning her next trip abroad.

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