Can’t sleep at night? Try reading a life insurance policy. If you want a quick life insurance quote, give us a call. But before you do that, you might want to learn a little about the myriad of life insurance products available.
Sometimes called Temporary Insurance. Like the name implies, coverage and pricing both expire at the end of the term. At maturity the coverage terminates. A typical term policy expires at age 85 (some are as early as age 65) and has pricing increases every 10-years. Pricing starts very low, but as you get older the premiums go up. Most term policies are cancelled by the owners in later years - as they become too expensive. Term policies have no cash value.
Premiums start off higher than a typical term policy, but they stay level and never increase. Coverage lasts for the entire life of the insured. Term to Age 100 policies have no cash value.
A form of permanent insurance. Like the name implies these policies cover you for the “whole” of your life. There is no expiry date. Premiums stay level. The premiums are higher than Term or Term to Age 100, however that additional premium is used to purchase ‘participating insurance’. Participating insurance pays dividends every year. Those dividends are returned into the policy and form a cash value which grows each year. Over time the cash value may be enough to make all future premium payments — thereby offsetting the need to make premium payments, out of your pocket.
Another form of permanent insurance. Like whole life, universal insurance provides lifetime coverage with no expiry or termination date. Also, similar is the fact that universal life allows cash to build up in the policy and can be used to offset future premiums. Where the two products differ is ‘how’ the cash value is managed. With a whole life policy, the dividends arise as a share of the insurer’s profits. With universal life, the policy owner decides on how the cash portion is invested (cash, GIC’s, index funds or managed funds).
Critical illness can give you a tax-free payment if you’re diagnosed with a serious condition. Your contract will define which conditions you’re covered for, but almost always include cancer, heart attack or stroke.
Disability insurance works when you can’t. It can give you tax-free monthly income to help pay expenses if an illness or accident stops you from working.