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If you’re wondering whether or not you should buy life insurance, ask yourself this one question: “Would my death leave anyone in a financial bind?”
If you answer “yes”, it may be time to get serious about shopping for life insurance.
Life insurance can offer peace of mind, ensuring that your debts or loved ones will be taken care of in the event of your death. But before you buy it, you need to ask yourself if you’ll qualify, and whether you should purchase term or permanent life insurance.
Term life insurance offers affordable protection for a specific period of time – usually 10, 20 or 30 years. It is pure insurance protection that pays a predetermined sum if the insured dies during a specified period of time. On the death of the insured, term insurance pays the face value of the policy to the named beneficiary. All premiums paid are used to cover the cost of insurance protection.
The main characteristics of term life insurance:
Universal life insurance separates the investment and the death benefit portions. The investment choices available usually include some type of equity investments, which may make your cash value accumulate quicker. This kind offers flexibility as you can usually change your premiums and death benefits to suit your current budget.
Whole life insurance provides lifetime protection, for which you pay a predetermined premium. Cash values usually have a minimum guaranteed rate of interest and the death benefit is a fixed amount. Whole life insurance is the most expensive life-insurance product available.
The main characteristics of permanent life insurance:
Depending on your insurance needs and budget using a combination of term and permanent life insurance will help address your short-term and long-term financial and estate planning concerns. Your insurance coverage should concentrate on your needs first then address your need for term or permanent insurance.
Always shop for a level-premium policy.
Nobody likes a surprise increase in their premium payments! So, before you buy insurance make sure your illustration shows that your premium payment is guaranteed not to increase over the duration of your coverage.
Guaranteed level for term
Flexible or guaranteed level
Guaranteed Level
Temporary, for length of term
Permanent or temporary. May increase.
Guaranteed permanent. May increase.
None
Yes – Cash value dependent on interest rate and policy changes
Yes – Cash value is guaranteed. Dividends subject to change
Lowest premium, purchase the highest amount of insurance for your money
Lowest priced permanent death benefit guarantee. Builds cash value.
Permanent death benefit, guaranteed cash value
Temporary death benefit and premium guarantee.
Cash value not guaranteed. Higher premium.
High Premium
Suitable for temporary need like mortgage insurance and education planning
Very flexible. Cash value can be used for different purposes.
Very safe. Conservative addition to retirement portfolio.
Lowest
More Expensive
Once we determine coverage needs and type we will determine the best rates from the all the quality insurance companies available in the Canadian marketplace to keep your premium payments affordable.
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