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The need for life insurance isn’t something anyone likes to think about, but it really shouldn’t be ignored. Regardless of what you already have to leave behind, life insurance always helps that little bit more. You don’t have to go overboard with life insurance coverage, even the bare minimum of life insurance in Ontario will do the trick.
That said, there are more robust life insurance coverage options you can take if you want. Deciding on how much coverage you want will require you to look at your current finances and determine how much your family might need.
Types of Life Insurance
Although you have a variety of life insurance coverage to choose from, it all falls into two main types of life insurance: term life insurance and permanent life insurance.
Term Life Insurance
Term life insurance is usually the cheaper option while still providing benefits. This insurance policy only lasts for a set number of years that you decide on before you purchase the policy. Common terms fall between 10 and 30 years, but it’s up to you. There are three ways you can go about term life insurance:
- Decreasing term life insurance is a policy that renews each year. Coverage decreases over the time of this insurance policy at a predetermined rate.
- Convertible term life insurance allows you to convert the policy to permanent if you wish, but it’s not mandatory.
- Renewable term life insurance is a policy that renews each year, and you’re quoted anew each year. Premiums typically increase annually, but they start out quite affordable.
Permanent Life Insurance
A permanent life insurance policy stays in effect for the entire life of the insured. The only way it lapses is if they willingly end the policy or stop paying the premiums. There are a few different types of permanent life insurance as well:
- Whole life insurance accumulates cash value over time. This cash can be used for a variety of things.
- Universal life insurance has a cash value and is flexible – it can be adjusted over time.
- Variable universal life insurance allows you to invest the policy’s cash value in a separate account.
- Indexed universal life insurance lets you earn a fixed rate of return on the cash value of the policy.
How Does Life Insurance Work?
Put simply, life insurance gives your chosen beneficiaries a tax-free sum of cash after you die. This is meant to take care of final expenses like a funeral, and hopefully support them a little as they grieve. Life insurance is especially important for those with young children who would be unable to fend for themselves, but it’s beneficial to anyone. Even if you have no dependents, there will still be final costs for someone to cover.
How to Get Life Insurance
While crucial, life insurance is complicated and it can sometimes be hard to qualify for. Pretty much everything about your life comes into play when applying for insurance – age, gender, general health, lifestyle, medical history, and even your driving record.
Regardless of your specifics, it’s always smart to shop around and get multiple life insurance quotes. Reach out today and we’ll help you through every step and every detail until you have complete peace of mind!
