Learn about the different Types

of Life Insurance

Term Life Insurance

Term Life Insurance is Life Insurance that Guarantees your Rates for a certain Term of Time. Such Terms can be as little as 5 years, 10 Years, 20 Years and can go all the way up to your age of 100.

Why would you use Term Insurance?

  • You have a mortgage
  • You have Kids
  • You need to cover off loans and debts
  • You want a Cost Effective Solution for your Life Insurance Needs

Risks of Term Insurance?

Although Term Insurance is the most cost effective way to cover off your Life Insurance needs, there are risks of relying on this as well. Learn more below…

What are the Risks?

  • The coverage will go away if you stop paying for it
  • At the end of the Term, if you do not renew, the Insurance Goes Away
  • There is no Value at the end of the Term
  • Term rates renew at much higher costs

Permanent Life Insurance

Permanent Insurance or Whole Life Insurance should be the foundation of your Life Insurance needs. Permanent Insurance will be there for you and your family no matter what your age is. The costs are level over the life of the insurance and carry many additional benefits outside of simple Life Insurance.

Why would you use Permanent Insurance?

  • You Want Level costs and increasing coverage
  • You are looking to Create an Estate Value
  • You want to Prepare for Tax Obligations
  • You want a Tax Efficient Retirement Income

Benefits of Permanent Insurance?

Although Term Insurance is the most cost effective way to cover off your Life Insurance needs, Permanent Insurance gives you the following benefits.

Permanent Insurance Benefits,

  • The Ability to Pay your Insurance costs in 10 or 20 year Paid up Programs
  • Stop Paying for your Insurance early and receive a Paid up Value
  • Shelter investment income inside the policy through the use of Dividends
  • Insurance Value can increase over time to follow with inflation

Universal Life Insurance

Universal Life Insurance is a hybrid in between a Life Insurance Policy and an Investment. When structured properly the Investment inside of your UL Policy will be sheltered from Tax, which can be used to supplement your Retirement plans quite nicely.

Why would you use Universal Life Insurance?

  • You Want Level costs and increasing coverage
  • You are looking to Tax Shelter your Investments
  • You want Professional Investment Management
  • You want a Tax Efficient Retirement Income

Benefits of Universal Life Insurance?

With so many options to blend Permanent Insurance with Term Insurance and also an Investment Account UL Insurance gives you the following benefits.

Benefits of a UL Policy

  • The Ability to Blend Permanent Insurance with Term Insurance, flexibility is Paramount
  • Have a Tax Sheltered Account inside your Life Insurance policy
  • Use the investment account to pay for the cost of Life Insurance
  • Compliment your Retirement in a Tax Friendly way

Download our Mortgage Life Insurance InfoGraphic here…

Mortgage Life Insurance

Mortgage Life Insurance is one of the most popular and common types of Insurance Canadians own. If you own a Mortgage, you more than likely have been offered this at the time of application. It is simple, you purchase a Term Policy to cover off the time and balance that remains on your Mortgage.

Why would you own Mortgage Life Insurance?

  • You are worried about leaving behind a large debt if you died
  • You Understand that your mortgage payment is one of the largest debts in the household
  • You want your family to stay in the home
  • You want to feel responsible

Important facts about Mortgage Life Insurance?

Although it is the most responsible thing to do, is protect the balance of a mortgage with Life Insurance, the version offered by Banks and Mortgage brokers are not helping your Family as much as they are protecting the Lenders… You DO NOT have to purchase the Bank’s version, you can do this on your own, and here’s why you would want to…

  • Your Family becomes the beneficiary, not the Bank
  • The Life Insurance is level through the life of your mortgage, and not a decreasing value, like the banks version
  • The cost is generally 30% cheaper when you own it yourselves
  • You can move your mortgage to a different lender without losing your coverage

Simplified Issue Life Insurance

Simplified Issue Life Insurance is a very popular options for many Canadians who do not want to go through the entire Underwriting process requiring blood tests or extensive medical examinations. The questions are very thorough in most cases, but do not require any invasive test such as blood or urine. The costs can be slightly higher due to the increased insurance risks, but are generally in line with fully underwritten insurance.

Why would you Consider Simplified Issue Life Insurance?

  • You would like to have some insurance in place, just in case
  • You do not enjoy meeting with a nurse, or giving blood
  • You want to Simplify the Insurance Process
  • You want to feel responsible

More about Simplified Issue Life Insurance?

Although there is nothing wrong with Simplified Issue Life Insurance, you must ensure you answer the questions thoroughly and truthfully to ensure the benefit you have applied for will be there for your family when they need it. If you answer the questions with less than the truth, your beneficiaries may have to prove at time of claim, that your answers were true. More facts…

  • You can purchase Term or Permanent Insurance through Simplified Issue
  • Insurance Amounts of up to $1,000,000 with no blood work needed
  • Insurance can be issued in as little as 24 hours
  • Many Simplified Issue programs can be applied for and Issued online

Guaranteed Issue Life Insurance

Guaranteed Issue Life Insurance is very popular with people with less than stellar Medical History, or of older Canadians who need to leave some Insurance behind to take care of Final Expenses or who are worried about a reduced CPP benefit for their surviving spouse. Guaranteed Issue is a great product in many cases, but there are some short term risks of Guaranteed Issue Life Insurance.

Why would you Consider Guaranteed Issue Life Insurance?

  • You would like to have some insurance in place, just in case
  • You do not want to be subjected to all the questions found in typical Insurance
  • You have had some health issues in the past or even currently
  • You have previously had Cancer, a Heart Attack, Stroke or Diabetes

More about Guaranteed Issue Life Insurance?

Although Guaranteed Issue is not the cheapest way to purchase Insurance, it may be the only option for those who have had or are currently facing medical challenges. Having some form of Life Insurance in place can give you a great amount of peace of mind for those you love. More facts…

  • Guaranteed Issue will generally have smaller Benefits attached.
  • Insurance Amounts of up to $100,000 with little to no questionnaire
  • Generally there will be a 2 year survivor period, you must survive 2 years for your family to receive the benefit
  • Most Guaranteed Issue plans are issued within 24 hours

Let’s Figure out, How much Life Insurance you may Need?

Mortgage and Debts

Calculate how much your current mortgage value is, and also the amount of un-secured debt you have such as Credit Cards, Car Loans and Lines of Credit. Would you want to leave those debts behind for your spouse or your kids to handle?

Your Income

You are the greatest contributor to your Household Income. If you were not able to bring home a paycheque for your family, would they be OK? Calculate how many years your family would need your income and multiply that by your annual income after taxes.

Kids Education Costs

Do you have kids, and do you want the best for them? An educated family is twice as likely to be best prepared for the financial challenges of the future. A typical education in today’s dollars could be $50,000 per child, depending on the level of post secondary education they choose.

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