Term Life Insurance in Canada could be good for you if you need a large amount of life insurance coverage for an affordable premium. This is because term insurance is a very basic life insurance coverage.
You may have heard that term is best of all life insurance plans. Many people feel that term life is the best solution for any life insurance need. For many situations it is the best solution, or at least an appropriate solution
You should think of think of term life insurance as a financial tool. Not all tools are right for all situations! If you are starting a family, have a lot of debt, have dependents relying on your income, or if you are starting a business then term life is probably best.
But what about the future? A Guaranteed Whole Life Insurance Canadapolicy might be a good choice for your long term needs if it fits your budget. Sometimes a combination of term for short term needs andWhole Life Insurance Canada for longer term needs is a great way to go and you have the right tools to handle all of your needs. Just some "food for thought"!
How does Term Life Insurance in Canada work
The word term is actually a good description of how a policy works. The term is a set time limit on the coverage period. Once the coverage period is over, the policy owner can renew the policy or to let the coverage end. The time limit can range from 1 – 30 Years. The most common time limits are 5, 10 and 20 Years. This contrasts with permanent life insurance (Whole Life, Universal Life Insurance, Term to 100) which does not expire.
A good term insurance policy will be “guaranteed renewable and convertible”. Renewable means that the policy will automatically renew at the end of every term. This should be guaranteed, regardless of health. The renewal premium should be guaranteed as well. Convertiblemeans that up to a certain age (usually 65), the policy can be switched (converted) to a permanent life insurance plan without any medicals.
Term policies have an expiry date. If the insured keeps the policy through its renewals it will expire at a certain age. Most of the time this is age 70 or 75. Some policies expire earlier, some later.
A disadvantage of term is that no cash value builds in these policies. So when you cancel, you have no savings or investment money coming. This is unlike permanent policies where a cash value builds.
Term life is the most affordable life insurance available and a large amount can be purchased for a small amount of money.
Buying Term Life Insurance in Canada
Buying Term Life Insurance in Canada can be fairly challenging. The lowest cost may not be the best policy. This is for many reasons: It may be tough to qualify for; it may have very high renewal rates; it may expire earlier than other policies; renewal may not be guaranteed; and so on.
It is also important to check the quality of the insurer offering the policy.
Why use a life insurance broker?
A good broker will take the time to talk to you about:
You should be careful in dealing with anyone claiming that one type of coverage is always best. Some insurance advisors feel permanent is always best. Others never consider permanent coverage and only recommend term. Remember, life insurance is a financial tool!.
Visit the Best Life Insurance page to get a comparison between the three main types of life insurance in Canada and a better understanding of some situations where each is used.
Visit Life Insurance in Ontario to find out more about buying life insurance.
Note: Always speak with a licensed insurance professional about your specific situation. This insurance information is general in nature and the policy wordings always take precedence. It is possible that there are errors and omissions in this website and www.canada-insurance-source.com, or its authors, take no responsibility.
Keep in mind that insurance licensing, legislation, and policies often vary by province and most certainly by country. Canada Insurance Source is a free information source. So use this site to gain a general understanding of insurance with your own area and situation in mind. Make sure you review the "please read" page. Always speak with a licensed insurance professional about your specific situation.
Always speak with a licensed insurance representative about your specific situation.
This site is general in nature and there may be errors or ommissions