Term Life Insurance in Canada
Term Life Insurance in Canada
Term life insurance in Canada provides coverage for a specified term, typically 10, 20, 30 or even 40 years as well. Here’s a brief overview of how it works:
Policyholder selects a coverage amount and term length.
Premiums are paid to the insurance company on a regular basis.
If the insured person passes away during the term, 100% of the death benefit is paid to the beneficiary.
There is no cash value component in the policy.
Some policies may offer renewability and convertibility options.
Medical underwriting is generally not required.
It’s essential to choose coverage and term length that suit your needs and consult with our expert insurance professional for guidance.
Who should consider Term life Insurance?
Term life insurance is ideal for individuals who need temporary and affordable coverage.
- It’s for parents with young children, ensuring their financial security..
- Homeowners can use it to pay off mortgages for their loved ones.
- Primary breadwinners benefit from income replacement to support their families.
- Individuals with significant debts can protect their loved ones from financial burdens.
- Business owners use it for business continuity and loan coverage.
- Those with specific short-term financial needs, like funding education, find it valuable.
- It’s a budget-friendly option, providing substantial coverage without investment components.
- Ideal for estate planning to cover taxes and financial obligations.
- It’s often used as supplementary coverage in a comprehensive insurance strategy.
Term life insurance is a type of life insurance that provides coverage for a specified period, known as the term. If the insured person passes away during the term, a death benefit is paid to the beneficiaries.
Affordability
Term life insurance is often more affordable than permanent life insurance (such as whole life or universal life) because it does not have a cash value component and provides coverage for a specific term.
No Cash Value
Unlike permanent life insurance, term life insurance does not have a cash value component. This means that if the policyholder outlives the term, there is no return on the premiums paid.
Simple and Transparent
Term life insurance is straightforward and easy to understand. The policyholder pays regular premiums for a specified term, and if the insured person dies during that term, the death benefit is paid to the beneficiaries.
Premiums Increase with Age
Renewing or purchasing a new term policy after the initial term expires may result in higher premiums, especially if the insured person's health has deteriorated.
Flexibility
Term life insurance offers flexibility in choosing the duration of coverage. Common terms are 10, 15, 20, or 30 years, allowing individuals to match coverage with specific financial responsibilities, like a mortgage or until children reach adulthood.
Limited Duration
Term life insurance provides coverage only for the specified term. If the policyholder needs coverage beyond the term, they may need to renew the policy at higher rates or explore other options.