Life is full of unexpected twists and turns. That’s why most people look for a solution that can bring them peace of mind and that is life insurance. It serves as a crucial financial safety net for your family if the unexpected were to happen.
When you look for the right life insurance, you should go with a coverage that not only provides the necessary support but also fits your budget. In Canada, two primary types of life insurance policies are available: term life insurance and permanent life insurance.
Within these categories, you’ll find various sub-categories, such as universal life insurance, limited pay whole life insurance, and term-to-100 insurance. The specific life insurance plan you choose should be decided upon several factors, including your age, household income, number of dependents, marital status, your debt profile, and mortgage loan and amortization schedule.
Today we will discuss term life insurance in Canada.
What is Term Life Insurance
Term life insurance offers coverage for a specific period, and if you pass away during that time, it provides a death benefit to your beneficiaries. It doesn’t come with the extra features of permanent life insurance, like the ability to serve as an investment tool. That’s why many Canadians prefer term life insurance plans.
With term life insurance, you have the option to choose coverage for 10, 15, 20, 25, 30, or 35 years, or until a specific age, such as 65 or 80. It’s designed to protect you during the years when you’re most likely to require financial security.
If you were to pass away while your term policy is in effect, your designated beneficiary would receive a guaranteed payout. However, if you surpass the duration of your term policy, no compensation will be paid.
Advantages of Term Life Insurance:
- Ideal for Young Families: This is a cost-effective solution for young families. This insurance plan is designed to protect the loved ones financially without straining their finances.
- Affordable Rates: Term life insurance is typically more budget-friendly compared to whole life insurance.
- Simplicity: Term life insurance policies are straightforward and easy to understand, requiring only a few key decisions.
- Flexibility: Whether it’s long-term debt or any short expenses, you have complete flexibility to select the term and coverage that aligns with your specific needs.
- Conversion Option: Many term policies include a conversion rider, allowing you to convert to a permanent life insurance policy without undergoing a new medical evaluation, providing added security and peace of mind.
Things to Know Before Buying a Plan
Before you buy a term life insurance, there are a few important factors you need to keep in mind to make a sound decision. Two important things are- how long you want the coverage to last and how much coverage you need.
But there are also other factors to consider. And these are- Living Benefits: Some policies offer the option to access a portion of the death benefit if you become terminally ill. Temporary Insurance: Term life insurance is also known as temporary insurance because it’s not permanent coverage. Guaranteed Renewal: Even if you have health issues, the insurance company will automatically renew your policy when the term is up. Coverage Adjustability: In some cases, you can adjust the coverage amount as needed, although usually only downwards. Laddering Life Insurance: This refers to having multiple life insurance policies with different expiration dates and coverage amounts to meet various needs. Convertible to Permanent Policy: You may have the opportunity to switch to a permanent life insurance policy before a specific deadline.Bottom Line
You need to understand that not every policy will have all of these features. Each policy is unique. Therefore, you need to take your time, understand your own needs and choose the one that best suits your requirements.
That’s why we recommend you to consult the certified life insurance experts at einsured.ca to get the best term insurance quote in Canada. Our experts can suggest you choose the right plan based on your current situation, future goal and other requirements.
Book a call now!
