Term Life Insurance
Most Canadians decide not to get life insurance because they assume it’s complicated and expensive. That’s a shame. Term insurance offers straightforward benefits and is the least expensive way to buy life insurance. The following will help you understand term insurance and determine if it is the best product for your immediate needs.
Term life insurance is a type of life insurance that lasts for a specific period of time known as a term, which can be a fixed number of years or until you reach a certain age. You pay premiums to the insurance company until the expiry of the term. In return, your beneficiaries are entitled to receive a tax-free death benefit if you die within the term of the policy. Once the term ends, your coverage also expires and you can stop paying premiums.
Term life insurance is a type of life insurance that lasts for a specific period of time known as a term, which can be a fixed number of years or until you reach a certain age. You pay premiums to the insurance company until the expiry of the term. In return, your beneficiaries are entitled to receive a tax-free death benefit if you die within the term of the policy. Once the term ends, your coverage also expires and you can stop paying premiums.
Term life insurance has several benefits over other forms of life insurance including permanent life insurance or whole life insurance. Therefore, it is well worth getting for most Canadians.
Simplicity is one of the primary benefits of buying a term policy since you only need to decide on the insurance company, the term length and the coverage amount. As long as you pay your premiums on time and in full, you’re covered for the entire term.
It is also highly affordable because the term is for a fixed period of time. Your life insurance provider will determine your exact premium based on factors such as age, occupation and overall health.
Flexibility is another important advantage. The ability to specify the term and coverage amount means you can use this life insurance to meet a particular financial need in the event of your death.
Most term life policies are structured on a level term basis, meaning the premiums won’t change over the term of the policy. However, at the end of the term, the insurance company may charge a higher premium if you wish to renew your policy.
When your term life insurance ends, and no claim has been made, you have a few options:
- You can let your term policy expire, stop paying premiums and your life insurance cover will end, upon end of the original term
- If you still need term coverage at the end of you initial term policy, there are some options too. You may be able to renew your term life policy for an additional term or covert your policy to permanent life insurance coverage, without requiring a new medical.
If you are in good health, as your honest insurance broker, we will advise you to apply for a new term insurance policy at lower rates than renewing your policy.
