If you’re looking for a flexible and affordable way to provide financial security for your loved ones for a fixed term, term life insurance might be a good option for you! Here’s what you need to know about it.
What Is The Difference Between Term Life Insurance And Permanent Life Insurance?
Term life insurance provides protection in the event of the death of the insured person that is limited in time, for a predetermined period or up to a certain age.
Unlike permanent life insurance, term life insurance is not intended to pay for your funeral expenses or leave an inheritance to your loved ones. In general, it serves rather avoid leaving them with a financial burden resulting from a specific and one-time commitment, such as a mortgage or tuition fees.
What Are The Main Features Of Term Life Insurance?
- It meets short-term needs, such as maintaining your children’s standard of living, repaying a debt or mortgage, or protecting business owners or shareholders.
- Its duration is limited: it ends at the end of the protection period indicated in the contract. Benefits are paid only if the insured person dies during the period determined in the contract.
- Its cost is advantageous and fixed for the entire duration of the contract.
- It can be renewed at the end of the fixed term, but its price could then increase.
- It can be converted into permanent life insurance. Again, this could cause its price to rise.
- It has no surrender value: in the event of cancellation of your policy, you will not recover any amount.
How Do I Know If Term Life Insurance Is Right For Me?
More concretely, this type of life insurance could be a good choice for you if you correspond to one of the following profiles:
- You wish to protect the realization of priority projects for a determined period. For example, it could be buying a house, starting a business or paying your children’s school fees.
- You can only spend a small amount on life insurance because of significant and immediate financial responsibilities.
- You want the ability to renew or convert your term insurance to permanent life insurance without having to provide medical evidence.
- You want to take advantage of a flexible life insurance product that can be adapted to your changing needs at any time by changing the insured amount or adding coverage (e.g. critical illness insurance, life insurance for your children, etc.).
To make an informed choice when it comes to life insurance, talk to an insurance advisor/broker. Its role is to advise you on the financial products best suited to your needs!
Visit the Safe Haven Financial website for all the information related to life insurance and investments. We are based out of London, Ontario, and provide the best insurance products like term life insurance, critical illness insurance, whole life insurance, disability insurance, travel insurance, and many more for clients all over Ontario.