What are the types of life insurance
What Are the Different Types of Life Insurance Policies Available in Canada?
Deciding on life insurance?
Here are your options.
There are variety life insurance policies available in Canada – the best type of plan depends on the insured’s needs and budget. The following is only a snapshot of the different types of plans:
Life insurance is generally grouped into two major types – temporary insurance and permanent insurance.
* Term insurance: These policies cover short-term needs. Term coverage is the simplest form of life insurance. It provides the largest benefit for the minimum amount of premium. The insured can use the benefits offered by this coverage to pay off debt or to fulfill any other need. The premiums on these policies start off low, but increase as the insured gets older. Term policies can typically last for 10 years, 20 years or 30 years, but Industrial Alliance offers a Pick-a-Term policy – the insured can pick his/her Term from ten to 40 years.
* Permanent life insurance: This type of life insurance provides insurance protection till the policy matures, as long as the insured pays the premiums on time. The three major types of permanent insurance are Whole Life, Universal Life and Limited-Pay.
o Whole life coverage: This policy provides the benefit of lifetime coverage, once again, as long as the insured pays the premiums on time. The premiums remain leveled throughout the
term of the policy and these plans also build a cash value. Loans are also permitted against this policy. Whole Life policies can be non-participating. These plans provide only guaranteed values and participating whole life coverage, which includes guaranteed and non-guaranteed cash values. The non-guaranteed values take the form of a dividend, which are generally tied to long-term interest rates balanced against the insurance companies profitability.
o Universal life coverage: This life coverage provides a facility for flexible premiums and adjustable benefits. The insured can change the amount of insurance as per his/her requirements. These policies can offer level death benefits or increasing death benefits, as well as an increasing cost of insurance and a level cost of insurance option.
o Limited-pay coverage: In this life coverage, the insured has to pay a leveled premium over a period of time that is shorter than the original duration of the coverage. The most common type of limited-pay coverage is a 20-Pay plan. The insured is covered for life and the policy is paid up after 20 years.
For more details you can contact us at 1.866.899.4849 or visit our Term Life Instant Quote Page or our Whole Life Instant Quote Page .
Posted by Chantal Marr.
Chantal Marr is a member of the Independent Financial Brokers of Canada.
Much of her success stems from her ability to listen to her clients' needs.Source: lsminsurance.ca