Life Insurance

By: The Living Benefits Group  09-12-2011

PERMANENT INSURANCE 

P ermanent insurance provides lifelong protection, and the ability to accumulate cash value on a tax-deferred basis. Unlike term insurance, a permanent insurance policy will remain in force for as long as you continue to pay your premiums. Because these policies are designed and priced for you to keep over a long period of time, this may be the wrong type of insurance for you if you don't have a long-term need for life insurance coverage.

Why would someone need coverage for an extended period of time? Because contrary to what a lot of people think, the need for life insurance often persists long after the kids have graduated college or the mortgage has been paid off. If you died the day after your youngest child graduated from college, your spouse would still be faced with daily living expenses. And what if your spouse outlives you by 10, 20 or even 30 years, which is certainly possible today. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren?

TERM INSURANCE

A s the name implies, term insurance provides protection for a specific period of time and generally pays a benefit only if you die during the "term." Term periods typically range from one year to 30 years, with 10 and 20 years being the most common term. Most of these policies have a guaranteed convertibility option that allows you to convert your term policy to a permanent one at a later date, without having to go through the length underwriting process and redoing your medical information.

One of the biggest advantages of term insurance is its lower initial cost in comparison to permanent insurance. Why is it cheaper when initially purchased? Because with term insurance, you are generally just paying for the death benefit, the lump sum payment your beneficiaries will receive if you die during the term of the policy. With permanent policies, your premiums fund the death benefit whenever it occurs and can accumulate cash value on a tax deferred basis.

Term insurance is often a good choice for people in their family-formation years, especially if they're on a tight budget, because it allows them to buy high levels of coverage when the need for protection is often greatest. Term insurance is also a good option for covering needs that will disappear in time. For instance, if paying for college is a major financial concern but you're pretty sure that you won't need life insurance coverage after the kids graduate, then it might make sense to buy a term policy that'll get you through the college years.


Contact The Living Benefits Group

Email - none provided

Print this page

Other products and services from The Living Benefits Group

09-12-2011

Long Term Care

If you develop a chronic illness or become disabled and are unable to care for yourself for an extended period of time, you’ll need long-term care services. Many people mistakenly think their government health insurance plans will pay for the long-term care services they may need at some point.


09-12-2011

Employee Saving Programs

W orking with only the top rated providers of Group Insurance and Retirement Savings Programs, we ensure that our flexible, value-added and innovative benefits planning model can be tailored to fit the specific needs of our clients, whether they are a part of a large multi-division/multi-site corporation or small and vibrant local company.


09-12-2011

Critical Illness

The tax free benefit provided by Critical Illness Insurance can help you to pay bills or reduce debt, seek alternative care such as Naturopathic treatment and medication or allow your spouse the means to be able to take a leave of absence from work to support you in your time.


09-12-2011

Disability Insurance

All of your plans for the future—from buying a home to putting your kids through college to building a retirement nest egg—are based on the assumption you will continue to earn a paycheck until you retire. You don’t hesitate to insure your home, car and other valuable possessions, so why wouldn't you insure something that is much more valuable than all those things.


09-12-2011

Retirement Benefits

Most Canadians therefore will rely on CPP as a base, topped up with the sum of the investment returns of their contributions into a Defined Contribution Pension Plan, a personal RSP and/or the recently announced Pooled Registered Pension Plan program, to provide for their retirement.